It's milk price rise season

Cost of production has gone up coupled with lower supply of milk during summer months

AWith temperatures starting to rise across the country, milk prices are on a boil.

Gujarat Cooperative Milk Marketing Federation (GCMMF), a leading entity in the dairy sector (it owns the Amul brand) raised prices of milk by Rs 2 a litre in parts of the state earlier this week. Several dairies in the north and west are likely to follow.

Though, Chennai-based Hatsun Agro, a leading private company in the sector, after having raised prices around a month and a half earlier, has ruled out any rise for now.

 GCMMF raised prices from Sunday in the Ahmedabad and Saurashtra areas, saying other regions in the state would follow soon. R S Sodhi, managing director, said the cost of production had gone up, coupled with the lower supply of milk during summer months.

“In the last two to three months, we are already paying 10-12 per cent higher procurement price to farmers, and if we compare to the year-before period, the prices are up around 18 per cent. Milk production is also down by around 25 per cent during the summer months,” he said.

GCMMF procures nearly 12 million litres of milk daily and sells around 4.5 million litres a day in Gujarat.

Vipin Gupta, managing director of Delhi-based Karnal Milk Foods, said: “Production of liquid milk is down around 30 per cent compared to the flush season, and there is a possibility of a price rise in the region in a week or two.”

In western India, several dairies plan to meet and decide whether to raise prices in the near term. “We are planning a meeting in a week or 10 days. Production has already gone down, and procurement prices are up almost 30 per cent on a year-on-year basis,” said Devendra Shah, chairman and managing director of Parag Milk Foods.

Maharashtra-based Mahanand Dairy says it is keeping a watch on the supply side. Explains V K Agnihotri, general manager, marketing: “We already raised prices in February. Some dairies in the region have also raised prices recently. We will consider raising prices if the supply goes down considerably. As of now, with skimmed milk powder exports down, and lesser demand of liquid milk with the closing of schools and colleges, the supply has more or less been able to meet demand so far.”

Demand for value-added products such as yogurt and ice-creams, however, had gone up, he said.

In the south, however, supply has improved after a few rainy spells. “We are expecting arrivals to improve in the coming few days, as summer rains have come. Also, we had raised prices around a month and a half back. We have no plans of a price increase for the next two to three months,” said R G Chandramogan, chairman and managing director of Hatsun Agro.

“Mother Dairy aims at a good balance between the consumer interest and the producers’ interest. Regarding Delhi and the National Capital Region, we are keeping a close watch on  procurement prices and other input costs,” said a Mother Dairy spokesperson.