Amul raises milk prices by Rs 2/litre in Delhi

An increase of 5-8% expected in other regions, too; other dairies to follow suit

With a rise in overall inflation and higher procurement cost, India’s largest milk marketing player, Amul, has decided to increase prices in the Delhi-NCR region by Rs 2 a litre from May 1. Dairies operating in different regions are set to follow suit, citing higher procurement and logistics costs.

The price rise has come after a gap of 13 months since the last increase by the Gujarat Cooperative Milk Marketing Federation (GCMMF), which sells the Amul brand of milk.

“We are raising prices in the Delhi-NCR region by Rs 2 a litre across all varieties. Last increase was made in April 2012,” said R S Sodhi, managing director, GCMMF. The recent increase is due to inflation and increase in milk procurement prices, paid to farmers, he added.

Amul sells around 2.4 million litres of packaged milk a day in the Delhi-NCR market.

Among private dairies, Hatsun Agro Products, a leading milk player from the south, said a five per cent hike is on the cards. This would be implemented within the next month. R G Chandramogan, chairman and managing director of Hatsun said, “In the past year, there has hardly been any inflation for milk. Normally, there is a five per cent inflation annually.

Logistic costs are increasing, and a five per cent rise is imminent.” He added that while Hatsun is planning to raise prices within the next month, other regional dairies will also follow suit in the next two-three months.

Another north-based dairy, SMC Foods Ltd, which sells milk and milk products under the Madhusudan brand, is also mulling raising prices by around Rs 2 a litre during the coming fortnight. Punjab State Cooperative Milk Producers’ Federation Ltd, popularly known as MILKFED (Verka), which had raised prices by Rs 1 a litre in August 2012, is also planning to raise prices within the next month. Sources in the dairy indicated that the rise could be in the range of Rs 1-2 a litre.

One of the major players in the western region, Parag Milk Foods, which sells milk and milk products under the Gowardhan and Go brands, too, has hinted at the possibility of a price rise.

According to Devendra Shah, chairman, Parag Milk Foods, milk and milk products could become costlier by five-eight per cent in the next three months, driven primarily by drought in parts of Maharashtra and Karnataka.

However, Mother Dairy, which supplies over three million litres of milk a day in Delhi-NCR, including packaged and loose milk through vending machines, has not yet decided on price rise.

Commenting on the milk price hike issue, a Mother Dairy spokesperson said, “The procurement cost and other overhead costs have gone up in the past few months. Mother Dairy at this point is still reviewing the situation and a decision on an increase is yet to be taken.”