For Shemisu Tahir, who owns a grocery store inside the compound of Ayat Condominium, dealing with milk suppliers is no different from sucking the blood out of a stone. Persuading the agents tasked to distribute the milk by their respective companies requires an enormous amount of effort. His daily routine, in fact, starts with collecting his milk quota from the distributors, which have allocated 25 plastic bags (12.5 litres) of milk a day to his store.

“If I'm not around, they won’t wait for a second. They just move to the next shop,” says Shemisu, who admits that milk is now like a precious item due to a critical shortage of supply. “Whoever comes first will be served first since I always run out of stock, even before midday.”

Though not something that is uncommon, households in Addis Abeba, the biggest dairy market in the country, have recently been hit hard by a critical shortage of milk. The monthly consumption of liquid milk in the capital stands at 8.5lt per adult while the figure for the national average is even lower. Annual per capita consumption of milk in Ethiopia ranges between 19lt and 24lt, while it is 120lt and 180lt in the cases of Kenya and Sudan, respectively.

Achieving the daily needs of consumers, however, had never been easy for both producers and suppliers - becoming even more challenging with the growing size of the middle-income population group, which includes those employed as professionals and senior managers, or who generate income from their own establishments.

“Gone are the days when anyone can buy milk anytime they want,” said Shemisu. “Of dozens of consumers who wanted to buy milk, I am not even serving a tenth of them.”

Disappointed customers often blame him for this, though the supply shortage is entirely not his fault. It is rather the result of a drastic fall in the production of pasteurized milk by processors, whose number increased from just one to more than 30 over the last two decades.

Sandwiched between challenges, milk processors now operate at lower than half of their production capacity. Even though industry insiders cite that the sector requires low cost of production, has an abundance of existing opportunities, including the growth in demand for milk, yoghurt, and lifestyle products, and enjoys the availability of multiple market channels, industry players have not really benefited from it due to several challenges. The major one being a critical shortage of milk supply.

“We're not even getting half of the milk supply we need,” says Hailu Eshetu, general manager of Family Milk, which has the capacity to produce 64,000lt of milk a day. “With the amount of milk which we are receiving now, it's possible that we could cease operations at any time. For instance, we closed our plant for almost a year due to the same reason.”

There are over 5,170 private farms that supply milk to the market in the capital. They produce 35 million litres of milk annually, out of which 73pc is sold to consumers, dairy companies and small stores that sell dairy products to households, 10pc is consumed by the farmers, 7.6pc is processed into butter and cheese, while the rest goes to calves.

Dairy companies usually source milk from collection points where smallholder farmers are expected to bring their output two hours after milking. But milk collection is unorganised, while the amount of milk supplied to dairy companies is hardly adequate; it is even declining. The fall in supply levels is caused by the low amount of money offered by milk processors, which pay between 20 Br a litre to cooperative unions, who could make 34 Br a litre if they sell to informal suppliers, cafés, or restaurants.

“The factories are offering us a price that is way below what we're being asked to pay by the farmers,” said Wondemineh Ashebir, chair person of Hibret Cooperatives Union, which collects milk from suppliers and sells it to households, cafés, and restaurants.

This, however, does not seem convincing to the dairy companies, including Elimtu Integrated Milk Industry, which was established 11 years ago with a capital of five million Birr, now reaching 65 million Birr.

“Competing with informal players is unthinkable for dairy companies since we produce in bulk and earn a relatively lower amount of profit margin. Forcing us to do so is no different from enforcing unfair trade practices,” said Alemu Assefa, general manager of Elimtu, which has the capacity to process 40,000lt of milk a day with over 90 employees but utilising only 62.5 pc of its installed capacity.

The informal buyers share that the unsatisfying amount of milk produced by farmers would not suffice even if it were to be fully supplied to the dairy market, chiefly due to shortage of feed for cows and the lack of use of modern breeding methods, including artificial insemination, to increase the productivity of cows.