To offset rising procurement costs, Mother Dairy, one of the biggest suppliers of milk in the national capital, could marginally raise its product prices, mainly of milk, in the next few months.
“The cost of milk procurement is expected to increase by Rs 0.5 to Rs 1 per litre from April because of summer, hence some part of it could be passed on to the consumer,” a senior official of the company, who didn’t wish to be named, said.
From 2009-10 to 2010-2011, the average procurement price of milk by Mother Dairy has increased from 13% to 17%, while the average sale price of milk across all variants has risen from 5% to 15% during the same period.
“We don’t intend to burden the consumer, but then we are left with little option as procurement costs have risen,” the official said.
Mother Dairy largely sources milk from Uttar Pradesh for meeting the requirement for the National Capital Region (NCR).
In 2010-2011, the company has twice raised its product prices in July and December.
The procurement price of milk, which normally goes down from September to March every year because of improved supplies has not dropped since the past two years.
“Because of drought in 2009 and improved rural economy, the concept of flush and lean seasons in milk production is getting altered,” the official said, adding that, since the past two years, procurement prices have not come down.
“We pass on almost 70%-75% of the sale price of milk to farmers and growers, hence when a consumer pays he should keep this in mind,” the official added. The surplus of milk available for sale with villagers is also getting squeezed.
Mother Dairy sells around 2.8 million litres of milk daily in the National Capital Region.
“Comparatively, price of milk is cheaper in Delhi than in other cities,” the official added.
