Dairies raised milk prices from July

At a time when agri-commodity prices are witnessing an upward trend, milk prices have also started showing signs of moving north. After India's largest dairy organisation Gujarat Cooperative Milk Marketing Federation (GCMMF) raised prices in the first week of June, several others have followed.

Private dairies in Maharashtra including Gokul, Parag Milk Foods etc have already raised prices by Rs 2 per litre. Delhi-based private dairies too have raised prices about three weeks back. Down South, however, private dairies like Hatsun Agro said that there were no immediate plans to raise retail prices of milk. Sources in Punjab-based cooperative dairy Milkfed, which sells milk and milk products under the Verka brand too said that no immediate hike was planned.

A leading player in the Delhi/NCR, Mother Dairy, which has not yet raised prices of milk, had indicated sometime back that they would review the situation in the coming weeks. As per news reports, around mid-June Mother Dairy's Managing Director S Nagarajan had admitted that they were facing intense pricing pressure, and that they would watch the situation for another four to eight weeks and may increase prices to match competition, probably by Rs 2 per litre.

The dairy major did not raise prices in early June at a time, when GCMMF (Amul) had announced a price hike. Mother Dairy had then said though the farmer prices have been increasing over the past three months due to environmental temperature, summers and season demand by about Rs 2.50 per kg; Mother Dairy has been able to absorb the impact.

The spokesperson had further said: "The prices are likely to go up further in coming months. We are keeping a close watch on the milk availability and price situation and may take a call on consumer prices if the situation warrants."

Amul had raised prices by Rs 2 per litre in Delhi and Gujarat market in the first week of June owing to a 20 per cent rise in cost of production.It had then said that prices would be raised across India in phases.

Amul's milk procurement prices, considered one of the highest in India, are currently around Rs 580-600 per kg fat. GCMMF is now procuring around 16.2 million litres of milk per day.

Kuldeep Saluja, owner of Delhi-based Sterling Agro, which has raised prices by around Rs 2 per litre around three weeks back said that with fodder prices going up, the cost of procurement has increased, and hence a rise in retail milk prices was unavoidable. "However, there would be no further hikes in the region for sometime now, as the monsoons have set in, thereby boosting supplies. I expect the prices to remain stable for the next one year or so," he said.

The dairy industry in India has witnessed a long period of stable milk prices primarily on account of weak global prices of skimmed milk powder (SMP) and huge inventory of SMP back home due to lack of export opportunity.