Poor monsoon hits milk output 15-20%
Prices of dairy products up.
Deficient rain this monsoon has affected milk production, particularly in the northern states of the country, driving up procurement cost of companies such as Mother Dairy and Amul by 10-15 per cent. Consequently, prices of dairy products such as ghee and skimmed milk powder (SMP) have also firmed up.
“There has been a drop in procurement in the northern region by about 15 per cent which we have made up through other sources,” said Paul Thachil, CEO (Dairy & Food), Mother Dairy, adding that procurement prices have gone up by about 10-15 per cent.
However, the capital’s largest liquid milk retailer has not yet decided on passing this increase to consumers. With delayed monsoon accentuating the already adverse procurement scenario, the milk retailer was constantly evaluating the situation and would take an appropriate decision at a suitable time, Thachil said.
Ghee and SMP prices have firmed up in the past 3-4 weeks. Ghee prices have jumped by about 20 per cent to Rs 240 a kg, while SMP prices have moved up marginally from Rs 130-135 a kg to Rs 135-140 a kg.
“Owing to delayed rain, milk production in the north-west region has come down by 15-20 per cent. The country will not be able to maintain an inventory for the next summer and we may have to import. Prices of dairy products could move up further during the festive month of October.
Therefore, the government should discourage export of dairy products,” said Kuldeep Saluja, managing director, Sterling Agro Industries, a leading SMP producer.
Sandeep Agarwal, director of SMC Foods, said the extended summer has kept demand for dairy products such as curd, ice cream and other beverages strong, while availability of milk has been going down.
“Once we have regular rain, availability should increase,” he said.
“There has been a delay in monsoon in northern states and procurement prices have also gone up. But apart from the monsoon factor, prices have also been moving up due to high cattlefeed prices,” said R S Sodhi, chief general manager, Amul.