lobal production of milk grew at a CAGR of 2.3 per cent between 2010 to 2014, reaching 792 MMT and primar ily driven by population growth, rising disposable incomes, urbanisation and westernisation of diets in developing countries like China and India. It is expected that global demand for milk and milk products will grow continuously, even though milk supply in China and India as well as countries within southeast Asia and Africa is not expected to keep pace with higher growth in these developing economies. Between 2015 and 2020, total production of milk and milk products is expected to grow at a CAGR of 2.1 per cent to reach 901.2 MMT by 2020.
The European Union, India and the USA are currently the largest milk and dairy product producers and consumers worldwide, accounting for 20.3"per cent, 18.3 per cent and 11.9 per cent respectively of global production in 2014. China, Russia and Saudi Arabia are the largest importers of milk and dairy products, accounting for 22.4 per cent, 6,5 per cent and 4.2 per cent of total global imports in 2014 respectively, while the largest exporters were New Zealand, European Union and USA with 26.5 per cent, 23.2 per cent and 15.3 per cent in 2014 respectively. Further, milk and dairy products production is expected to increase in India at a CAGR of 4.2 per cent over 2015-20, resulting in India overtaking the European Union to become the largest milk and dairy products producer by 2020. However, India currently lags behind in dairy exports, accounting for only 1.3 per cent of total exports in 2014 - despite the potential for dairy exports from India being immense since it is surrounded by milkideficit countries like Bangladesh, China, Hong Kong, Singapore, Thailand, Malaysia, Philippines, Japan, UAE, Oman and other Gulf countries:
Rapid urbanisation and increasing income levels in India has resulted in a shift in consumer dietary patterns, where they are moving away from cereals to high value food products like milk, egg, meat and fruits and vegetables - a natural corollary to the negative income elasticity for cereals in India and positive income elasticity for high quality food. This change is now occurring in both rural and urban households where 2012 witnessed monthly consumer expenditure towards milk and cheese at 16 per cent of total expenditure on food in urban areas and 15 per cent in rural areas.
Globally, cow milk represents the preferred milk type across the world. Cows' milk accounts for nearly the entire milk consumption in the developed world, where consumers are aware of its nutritional benefits and advantages over other milk sources such as buffalo milk. Cows' milk accounted for approximately 83 per cent of the total milk production in 2012 and represented the most popular source of milk in the European Union, the United States of America, China, Australia and New Zealand. Cow's milk was followed by buffalo milk which is accounted for 12.9 per cent of the total milk produced in the world.
Although, buffaloes accounted for most of the milk produced in Asian countries including India and Pakistan, the share of cow's milk in total consumption has been steadily increasing. Amongst the major milk producing countries, milk is almost entirely sourced from cow's milk in most developed nations.
India is the world's biggest producer and consumer of milk on a country-wise basis. However, the per capita consumption of milk at 97 litres per year is well below that of other major milk markets, except for China. Milk production volumes in India have grown rapidly from 17MMT in 1952 to 147 MMT in 2015, enabling India to become the world's biggest milk producer. India's population growth and rising incomes witnessed milk consumption of 138 MMT in 2015 to become the world's largest milk consumer. In 2014, India's dairy industry was worth Rs 4,061 billion, with CAGR growth of 15.4 per cent during 2010 to 2014. Total production of milk and dairy products is expected to increase from 147 MMT in 2015 to 189 MMT in 2021, while total consumption of milk and dairy products is expected to increase from 138 MMT in 2015 to 192 MMT in 2021. India's dairy industry is expected to maintain growth at CAGR of 14.9 per cent between 2015 to 2020, to reach a value of Rs 9,397 billion by 2020. In India, milk consumption mainly consists of buffalo milk at 49 per cent - followed by cow milk (48 per cent) for 2014. However, cow milk is growing at a faster pace than buffalo milk and is expected to account for majority of total milk consumed in line with the developed markets. On state level, Uttar Pradesh, Rajasfhan and Andhra Pradesh were the largest milk producers accounting for 17.7 per cent, 10.5 per cent and 9.8 per cent of total milk production in 2014. Cow milk is dominant in 24 of the 35 states and union territories in India, where the top five milk-producing states currently are: Tamil Nadu, Uttar Pradesh, Rajasthan, Maharashtra and West Bengal.