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Even as the country's largest dairy player Gujarat Cooperative Milk Marketing Federation (GCMMF) has raised prices of milk in Gujarat from Monday, most other dairies across the country are unlikely to follow suit anytime soon.
Dairies across the major milk producing zones like Maharashtra, National Capital Region (NCR) and South said that there were no plans to raise prices of milk at the moment as there was sufficient supply of skimmed milk powder (SMP) in the country.
Devendra Shah, chairman, Parag Milk Foods, a leading private dairy in Maharashtra said, "Our plant capacity is 2 million litres per day and we are using it completely. As of now, we have not faced any drop in milk procurement. And compared to the last year, the input costs have not increased for this year." Regarding consumer pricing, Shah added that, "We will see and analyse how the industry is shaping up, but currently, there will be no hike in the prices of Parag Milk Foods products."
Kuldeep Saluja, managing director of Delhi-based Sterling Agro too pointed out that there was no scope to raise prices at the moment, and that consumers will continue to have respite for some more time.
Down South, the dairies are currently flush with milk supplies, as RG Chandramogan, managing director of Hatsun Agro said that there were no immediate plans to raise milk prices.
Another leading player Mother Dairy too is not mulling a price rise at the moment. A Mother Dairy spokesperson said, "With outlook of the procurement prices of the milk being stable,we don't foresee any hike as of now."
GCMMF managing director R S Sodhi said that input prices in terms of dry fodder, green fodder as well as cattlefeed have gone up in the recent months, and that the federation was already paying Rs 3 per litre more as procurement prices to farmers.
Industry insiders say on grounds of anonymity that since cooperatives like GCMMF have not reduced the procurement price to the farmer, they are finding it difficult to maintain the current retail prices, especially at a time when SMP prices are low (around Rs 170-172 per kg in the international market) and producers have to sell it at a loss. The Banaskantha Milk Union in Gujarat paid Rs 23.34 per litre of milk to producers in March, up from Rs 22.07 per litre in the same month in 2014. Payments for the producer in Surat grew to Rs 24.4 a litre from Rs 22.7 for cow milk in the same period.
Earlier, Rajasthan Cooperative Dairy Federation (RCDF) chairman Jog S Balot had said that they were planning to raise procurement prices to farmers as their milk collection had fallen during the summer months. The average procurement price at RCDF milk unions is around Rs 550 per kg fat.
However, industry sources point out that while cooperative dairies have held on to the prices paid to the farmers, large private players have slashed prices to farmers to the tune of about Rs 7 per litre in states like Punjab and Uttar Pradesh. "Private dairies in Punjab were paying around Rs 29.9 per litre for buffalo milk in March this year compared to Rs 40.5 per litre in March 2014," said an industry source who did not wish to be identified.
