Guj milk co-ops increase procurement prices

Here's some good news for farmers in the state. Three milk co-operatives in Gujarat have decided to increase procurement prices while two more are planning to follow suit.

However, the decision of milk co-operatives to hike milk procurement prices by Rs 5 to Rs 10 per kg-fat in near future has dealt another blow to private dairies in Gujarat.

With several members of the Gujarat Co-operative Milk Marketing Federation (GCMMF), which markets Amul brand of milk products, planning to hike procurement prices, private dairies too may have to shell out more.

"We are facing tough time at present, as the hike may impact our bottomline. There is a phenomenal increase in the prices of packaging material and furnace oil. At present, we have not increased our prices but we may think of increasing from July 16," said Jayesh Patel, managing director, Vimal dairy and member of Private Milk Producers and Processors Association.

Recently, Ahmedabad-based Uttam dairy, Rajkot-based Gopal dairy, Bhavanagar-based Sarvottam dairy increased their prices by Rs. 10 per kg-fat, while Amreli and Surendranagar unions all set to increase their purchase prices from July 11.

Increase in procurement prices may hit private players hard as margins of these dairies are already in pressure. These players have to pay a higher price than cooperative players to intact their milk supply--besides high transportation cost and lower sale. Presently, private dairies pay around Rs. 310 per kg-fat to farmers, as compared to an average of Rs. 290 per kg-fat being paid by GCMMF members.

"The prices of fodder and cattle feed in on the rise. The increase in purchase prices will give farmers some respite," said Dhiraj Chaudhary, chief executive officer, Surendranagar District Cooperative Milk Producers' Union Ltd.

HA Nadiadwala, managing director, Ahmedabad District Milk Producers' Union Ltd., which increased its purchase prices by Rs. 10 to Rs. 280 from Rs. 270 from July 1 says the union may announce a further hike in procurement prices in the future.

While Surendranagar dairy plans to increase procurement prices by Rs. 10 (taking it to Rs 280 per kg-fat) from July 11, the Amreli union is all set to raise prices by Rs. 5 to Rs. 275 from the existing Rs. 270, Bhavnagar and Rajkot dairies increased their procurement prices from July 1 by Rs. 15 and Rs. 10 to Rs. 300 each respectively.

Other big dairies like Dudhsagar dairy, Banas dairy may also follow suit.