Milk prices may not go up in next 5-6 months: Amul

Official says major cooperatives received 20-25% more milk in last few months due to a drop in procurement by milk powder manufacturers

The price of milk and milk products in the country would remain subdued in the near term with no room for increase in the next 5-6 months, according to Amul India managing director RS Sodhi today said.

“Looking at the present local market conditions, and also the world over, I don't see any increase in the prices of milk and milk products in the next 5-6 months in the country. Major cooperatives have been receiving 20-25 per cent more milk in the last few months due to a drop in procurement by milk powder manufacturers,” Sodhi told mediapersons here. Milk powder manufacturers had reduced procurement following a 30-40 per cent drop in the price of value-added product globally, he added

However, he said the current environment of no price rise and the falling inflation would “motivate” people to consume more milk and milk products, brightening the scope for future rise in prices.

Sodhi, who today officially launched Amul milk in Hyderabad, said the Gujarat Co-operative Milk Marketing Federation-run Amul aimed to become the top FMCG company brand in the country by clocking a turnover of Rs 50,000 crore by 2020.

“We have been growing consistently at 24 per cent for the last five years, which is the highest in the FMCG sector. We are on track to clock a turnover of Rs 50,000 crore by 2020,” he said.

For the fiscal ending 2013-14, Amul’s total turnover stood at Rs 18,150 crore, which it expects to grow to more than Rs 22,000 crore by the end of the present fiscal.

To invest Rs  4,000-5,000 crore in the next 3 years
Anticipating a peak processing capacity of 320 million litres per day for it, as against 230 million litres now, Amul plans to invest Rs 4,000-5,000 crore in the next three years in creating modern dairy processing units in the country.

“We will set up four new new dairy processing units besides expanding the existing ones in Gujarat, and establish 8-9 dairy plants outside Gujarat in the next 3-4 years,” said Sodhi.

Russia holds good promise
According to Sodhi, there is a high demand for milk powder, cheese and butter in Russia, which, a few months ago was importing from Europe. However, with economic sanctions by the European Union cutting exports, Russia is looking at Indian companies to meet its dairy needs.

Speaking on this, he said, “In the next 5-10 years, the Russian market is a good opportunity for the Indian dairy players.”

Amul is awaiting clearances from the Russian authorities so that it could start exports in the next two-three months.