Nepal Dairy Crisis: Sumit Kedia Urges Temporary Butter Imports Amid Ghee Shortage
8th November 2026, Kathmandu
Nepal Dairy Industry Faces Severe Ghee Shortage: Sumit Kedia Urges Temporary Butter Import Permission to Meet Market Demand
Despite high demand for ghee during the peak festive season, Nepalese dairy processing plants are struggling to supply sufficient quantities to the domestic market.
Industry leaders attribute the ongoing supply pressure to lower-than-expected raw milk collection and stricter enforcement against informal cross-border dairy trade.
Addressing the supply crunch, Sumit Kedia, Director of Sitaram Gokul Milks Pvt. Ltd. and former President of the Nepal Dairy Association, has urged the Government of Nepal to grant temporary permission for industrial dairy units to import butter in 15 kg bulk packaging.
Kedia emphasized that allowing short-term bulk butter imports as a raw material is essential to bridge the immediate market deficit until domestic milk production recovers.
Ghee Supply Plunges by Over 65 Percent
According to Kedia, Sitaram Gokul Milks normally distributes around 10 tonnes of ghee per month. However, present supplies have dropped to barely 3.5 tonnes per month, marking a reduction of over 65 percent in supply capacity.
“Demand from sweet shops, hotels, and restaurants is continuous, but we are unable to fulfill orders,” Kedia stated. “Even with long-term corporate clients under annual supply contracts, our inability to deliver required quantities is straining key commercial relationships.”
He noted that while Nepal’s traditional flush season for milk production spans from the month of Kartik through Phagun (mid-October to mid-March), raw milk collection from dairy farmers has failed to reach expected volumes this season. Under normal conditions, daily national milk production averages 3.5 million to 4 million liters, a threshold the market has fallen short of reaching this year.
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Strict Border Controls and the Informal Supply Deficit
Kedia analyzed that the tightening of informal dairy imports from India has further compounded the market shortage. In previous years, a combination of domestic production and informal border supply helped balance consumer demand. While welcoming the regulation of informal imports as a positive step for law enforcement, he argued that the government must provide flexible, formal alternatives for industrial raw materials.
“We are not advocating for unrestricted consumer dairy imports,” Kedia clarified. “Our demand is strictly limited to allowing temporary imports of 15 kg butter blocks as an industrial raw material.”
Under the proposed arrangement, domestic processors would convert imported bulk butter into ghee to stabilize retail availability. Imports could then be suspended as soon as local milk collection rebounds. Kedia warned that an unaddressed ghee shortage could shift consumer habits toward cooking oil, causing long-term demand erosion for Nepal’s domestic dairy sector.
Shift from Excess Powder Stock to Raw Material Scarcity
Recalling market trends from previous years, Kedia highlighted how the domestic dairy sector has transitioned from structural surplus to acute raw material shortage. In past cycles, excess milk production forced processors to convert surplus milk into skimmed milk powder (SMP) and butter stocks. Large inventories tied up working capital and delayed payments to dairy farmers.
Today, the situation has reversed. Processors no longer hold excess buffer stocks of SMP or butter, while farmer payment cycles have stabilized significantly compared to previous years.
Calls for Quality Recognition and Equal Policy Support
Defending the progress of Nepalese dairy processors, Kedia highlighted significant advances in modern processing technology and raw milk quality standards. He called on commercial buyers in the hospitality and food processing sectors to move past outdated perceptions regarding local dairy products and actively partner with domestic suppliers.
Furthermore, Kedia urged policymakers to maintain a level playing field between public and private enterprises, stressing that government support should not remain exclusive to the state-owned Dairy Development Corporation (DDC).
“When high-ranking state officials and public institutions endorse both private and public sector Nepalese dairy products, it sends a strong, reassuring message to consumers and strengthens national production,” Kedia concluded.
For more: Nepal Dairy Crisis Sumit Kedia Urges
