Sterling Agro Industries Ltd., which markets dairy products under the “Nova” brand, has not sold a single bulk pack of ghee or milk powder in the last 20 days, signaling a sharp demand disruption in India’s dairy sector amid the ongoing Middle East conflict and LPG shortage.

“We have not sold a single 15-kilogram tin of ghee or 25-kilogram skimmed milk powder pack in the last 20 days,” Ravin Saluja, director at the company told businessline.

Bulk packs—sold in large formats to food service and confectionery players—account for nearly 50 per cent of sales for manufacturers like Sterling Agro which reported ₹2190 crore of revenues in FY25.

The development points to a broader demand shock in the industry’s bulk segment, which caters primarily to institutional buyers such as caterers, hotels, canteens and sweet shops.

“Because of this war, the milk industry is facing a major challenge. It is not just exports—there is an LPG shortage. This has led to a drop in demand from caterers, canteens, hotels and sweet shops,” Saluja said.

“For manufacturers like us, these bulk items form 50 percent of our monthly sales. Right now, that entire segment has been impacted,” he added.

Sterling Agro owns and operates three world class factories with a daily milk handling capacity of 2.6 million Liters. Products are marketed under the brand names of Nova and A-One (for dairy creamers).

Sterling Agro is a preferred supplier for bulk customers which include large institutions and well known multinational corporations. Sterling Agro Industries Ltd., which reports annual revenues of around ₹2,190 crore and exports to over 33 countries, derives about ₹60 crore from international markets.

Twin hit of exports and domestic demand

Industry players like Sterling Agro say the domestic slowdown comes alongside disruptions in exports due to the conflict involving Iran, which has impacted shipping routes and logistics.

Shipments to key markets such as Saudi Arabia and the Gulf region have slowed, with shipping lines imposing war risk surcharges and vessel availability tightening.

“All the shipments going to the middle-east, especially Saudi Arabia are impacted. The shipping lines have added a war surcharge of $2000 per shipment, plus the ships are not easily available,” Saluja said.

In some cases, consignments have been stranded mid-route, forcing companies to offload cargo at transit ports and rework sales, adding to costs. Recently 100 tonnes of Anhydrous Milk Fat (AMF) meant to be shipped to Russia, got stranded at a port in UAE and Sterling Agro was forced to sell the product in the middle-east market.

“The prices of milk products have increased in the Middle-east, but we are not able to take advantage as materials are not being shipped to the Middle-east markets. Even in the case of the stranded AMF cargo we did not make any profit as the cost of changing the documents, testing of materials, cost of warehousing, etc impacted our bottom lines,” he added.

Packaging costs have also risen sharply —by about 30 per cent— due to shortages of raw materials and industrial gas used in manufacturing export barrels.

Published on April 6, 2026