Milk prices up on rising input cost

Amul takes lead in west; others to follow, blames expenses across categories

Milk prices rose by Rs 2 a litre in the western region from Monday, led by Gujarat Cooperative Milk Marketing Federation (GCMMF), the leader in the organised sector.

The reason given is a rise in raw material costs (prices to farmers) by almost 10 per cent over last year, power rates and petroleum prices, among others.

GCMMF, which sells packaged milk under the Amul brand, raised its prices by Rs 2 a litre across all categories in Gujarat, following a similar move a month earlier by Delhi-based Mother Dairy.

Following the move, many in the unorganised sector raised milk prices by Rs 2 to sell at Rs 54 a litre from Monday.

The price of Amul Gold has gone up to Rs 42 a litre. For Amul Shakti and Amul Taza, consumers would have to pay Rs 31 and Rs 29 a litre, respectively.

Effective May 27, Mother Dairy had raised milk prices by Rs 3 a litre across varieties.

R S Sodhi, managing director of GCMMF, said: “We had raised milk prices everywhere but in Gujarat, three months ago. We’ve now taken the price hike to Gujarat as farmers have raised milk prices in the state...we had to pass on the rise of input costs to consumers. However, there is no further room for a price hike in the near future.”

“Both input and employee costs have risen sharply in the past one year. Even at this price, milk is non-remunerative. Hence, another round of hike cannot be ruled out in the near future,” said Ballibhai Tirji Maradia, president of the Bombay Milk Producers Association.

A log (quintal) of green grass, quoted at Rs 600 three months earlier, has gone up to Rs 800. Experts say rain have disrupted its supply. The price of kapas khalli (cotton oilseed cake) has moved up by Rs 200 a quintal in the past three months, from Rs 1,600 a quintal to Rs 1,800 a quintal. In addition, all grains used as animal feed have become costlier.

The price of milk generally moves along with that of diesel, albeit in lower proportion. In the past five months, diesel prices have risen seven per cent to around Rs 56 a litre from Rs 52 in Maharashtra. Transportation is a major component of overall cost.

GCMMF had raised milk prices by Rs 2 a litre in north India three months earlier but had not done so in Gujarat. Delhi-based Mother Dairy raised its prices three months earlier in and around the national capital but did not do so in western India. According to an official, the price rise effected three months ago was automatically spread across the country.

Another popular local brand, Mahananda, which generally follows Amul and Mother Dairy, is awaiting a decision from its board. “We have not taken a final decision. But we cannot rule out a rise, as animal feed has become costlier,” said a company official.

With the rise, the Baroda District Co-operative Milk Producers’ Union  has decided to pay an additional Rs 10 a kg of fat, to Rs 465, to its 200,000 milk producers.

Inputs from Rajesh Bhayani