NAGPUR: Major milk brands with a market in the city, including Amul and Mother Dairy, have increased prices by Rs 2 per liter in the past three to four days. This was followed by some of the regional brands which also increased the prices.
The prices were revised after a year and a half of difference. This is not due to the decline in milk production, but rather to the dairy industry which blames it on rising fuel costs.
Overall milk production is stable. But the cost of production on the side of the farmers has increased. The basic factor is the increase in diesel prices which has resulted in a significant increase in feed prices. It also made transportation expensive for dairy plants.
The shrinking margins of milk producers led to higher purchase prices for dairies.
Even the cost of inputs at the end of milk processing units has increased, resulting in an increase in the MRP of milk packages ultimately, according to industry sources.
Anoop Kumar, the state’s principal secretary (livestock department), said the rise is not due to milk production but to rising input costs. The milk production of the organized sector is between 1.32 crore and 1.25 crore liters per day in the state. This is very much in line with the normal average without any drastic drop in production.
RS Sodhi, general manager of the Gujarat Complete Milk Marketing Federation, also said milk production was stable and the flow had increased to cooperatives as private actors reduced their purchases.
Industry sources say that in addition to normal milk production, there is also a large carryover stock from last year. This is in the form of white butter and powdered milk. These are raw materials for making ice cream.
The past two years have seen weak demand for ice cream. Even that month of May saw lukewarm demand for ice cream, which caused stockpiles of milk powder and butter to pile up. Since the items can be stored, they can be used for years to come.
Anil Upadhyaya of Dinshaw’s Dairy said it is not only the purchase price that has increased, but even the landed cost to the dairy industry has increased by Rs 3-4 per liter. “The cost of feeding cattle has increased by Rs 30 per quintal. The production is normal compared to the season. Not only that, there is a surplus of raw materials for ice cream like white butter and powder. Dinshaw alone has an additional 500 tonnes of white butter, ”he said.
A source at Haldiram’s also confirmed that milk prices have been increased by 2 rupees. This is mainly because of diesel prices affecting the cost of logistics, the source said.
The price hike was necessary to keep margins intact, industry sources say.
A source from Mother Dairy said the purchase price was Rs 25 for cow’s milk and Rs 40.50 for buffalo milk. The latter was increased by one rupee.
A statement released by Mother Dairy says the company is under inflationary pressure on overall input costs. Even milk production has been affected due to the pandemic. Farm-gate prices for milk have increased 8-10%, coupled with increased operating costs which include processing, logistics and packaging costs. The increased costs were not passed on to the consumer for a year, however, the company said.

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