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Curds are a dairy product obtained by coagulating milk in a process called curdling. 
Lactobacillus is a genus of bacteria which can convert sugars into lactic acid by means of fermentation. Milk contains a sugar called lactose, a compound sugar made by the glycosidic bonding between glucose and galactose. When pasteurized  milk is heated to a temperature of 30-40 degree Celsius or even at room temperature or refrigerator temperature, and a small amount of old curd or , the lactobacillus added in that curd thus the sample starts to grow. These converts the lactose into lactic acid, which imparts the sour taste to curd. Raw milk naturally contains lactobacillus. 
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Fermentation is a metabolic process that converts sugar to acids, gases or alcohol.
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When a small amount of curd is added to luke warm milk ,during the reaction

,a use full bacteria named lactic bacteria will produce and convert milk into curd.

thus curd is formed
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