The amount of money spent on milk, eggs and meat in India has doubled over five years with supply shortages driving up prices and general food inflation.
Overall spending by Indians on protein foods doubled to Rs2 trillion in 2009-10 from 2004-05 with two-thirds of this coming from rural households, according to CRISIL Research, India’s largest independent research house. But while more rural Indians are including protein in their diets, there is concern that supply shortages are driving up prices and impacting overall food inflation.
CRISIL estimated that, in 2009-10, around 18-25% of demand for meat went unmet, due to the shortfall in supply, while rising milk, egg and meat prices accounted for nearly 50% of overall food inflation in India. The lack of effective cold storage infrastructure has contributed to the supply shortfall.
Rural per capita consumption of milk, eggs and proteins continues to remain lower than in the cities, reflecting a potential for significant further growth of sales of protein in rural areas. Rural per capita (annual) consumption of meat stood at 5.7 kg in 2009-10 compared to per capita urban consumption of 6.7kg.
Unless the supply of milk, meat and eggs for direct consumption is increased to meet the growing demand, protein-food inflation is likely to remain high, said the report. Mukesh Agarwal, president of CRISIL Research, said: “If high protein inflation persists, it could eventually adversely impact protein-food affordability, particularly in rural areas. Given the high nutritional value of proteins, this could be detrimental to the welfare of the rural population. It is, therefore, imperative that relevant measures be taken to increase production of protein-food to address the unmet demand and rein in food inflation.”