Milk market in Nepal

Earlier Report Observations

Nepal's milk market volume expanded from 2.24 million tons in 2018 to 2.77 million tons in 2023, initiated by state-led infrastructure investments and the adoption of improved cattle breeds. The Dairy Development Corporation established a central processing plant in Lainchaur and mobilized milk collection through cooperatives, while the government's 2019 increase in customs duties on imported dairy products encouraged domestic production. Even the COVID-19 pandemic in 2020 caused temporary sales disruptions, but farmer support programs helped maintain growth.

The growth momentum accelerated from 2021 onward through artificial insemination campaigns and further breed improvement. In 2022, the introduction of subsidies covering up to 75% of costs for commercial dairy farmers, coupled with improved milk transportation via tankers, facilitated market access. A ban on powder milk imports also redirected processors toward local milk. In 2023, a Nepal Government and World Bank program supporting milk production and marketing, along with biogas plant installations, provided additional impetus for the sector's expansion.

Production milk in Nepal

In kind, 2017-2020, K t

Top producers of milk, 2017-2020

World map of production of milk, 2017-2020

Nepal's milk production has increased for the third consecutive year. In 2020, the country produced 2,451 thousand tons of milk, reflecting a modest year-over-year increase of 5.8%. Between 2017 and 2020, production grew by 19.4%, which translates to an annualized growth rate of 6.1%.

Annual dynamics of production in Nepal in kind, 2017-2020, K t

Exports milk from Nepal

Exports in kind, t

The market exhibited volatility during the observed period. Exports reached their lowest point in 2020 at 1 ton of milk, marking a 94.0% decline compared to 2019. The peak was recorded in 2018 at 47 tons, with the largest increase of 41.8% also occurring that year. Overall, exports fluctuated significantly, with a 38-fold difference between the 2018 peak and the 2020 trough.

Annual dynamics of product's exports from Nepal in kind, 2017-2020, t

From 2017 to 2020, Nepal's milk exports in kind were primarily directed to two key markets: China, which accounted for 87.4% of total flows, and India, with 12.6%. Together, these two countries represented 100.0% of Nepal's export volume during this period.

Structure of product's exports in kind by countries, 2017-2020

World map of product's exports from Nepal in kind, 2017-2020

Exports in value, K $ US

The market demonstrated volatility over the observed timeframe. In 2020, Nepal's milk exports in value terms totaled 5 thousand US dollars, a sharp decline of 97.1% from 2019. The highest value was recorded in 2018 at 178 thousand US dollars, which also saw the largest increase of 6.0%. Exports varied widely, with a 38-fold difference between the 2018 peak and the 2020 trough.

Annual dynamics of product's exports from Nepal in value, 2017-2020, K $ US

Throughout 2017–2020, Nepal's milk exports in value terms were heavily concentrated on China, which dominated with 99.1% of total flows.

Structure of product's exports in value by countries, 2017-2020

World map of product's exports from Nepal in value, 2017-2020

Imports milk to Nepal

Imports in kind, t

The market showed signs of volatility during the observed period. Imports bottomed out in 2020 at 2,682 tons of milk, representing a 72.2% decrease compared to 2019. The peak was in 2019 at 9,648 tons, which also recorded the largest increase of 128.3%. Overall, imports fluctuated with a 3.6-fold difference between the 2019 peak and the 2020 trough.

Annual dynamics of product's imports to Nepal in kind, 2017-2020, t

From 2017 to 2020, Nepal's milk imports in kind were primarily sourced from India, which accounted for 63.9% of imports, followed by Thailand at 14.8% and Belgium at 3.6%. Together, these three countries made up 82.3% of total import flows.

Structure of product's imports in kind by countries, 2017-2020

World map of product's imports to Nepal in kind, 2017-2020

Imports in value, K $ US

Nepal's milk imports in value terms declined for the third consecutive year. In 2020, imports totaled 11,962 thousand US dollars, a 4.0% decrease from the previous year. Over the period from 2017 to 2020, imports fell by 36.1%, corresponding to a compound annual growth rate of -13.9%.

Annual dynamics of product's imports to Nepal in value, 2017-2020, K $ US

Between 2017 and 2020, Nepal's milk imports in value terms were largely concentrated on India, which accounted for 76.6% of total flows, with other countries making up the remaining share.

Structure of product's imports in value by countries, 2017-2020

World map of product's imports to Nepal in value, 2017-2020