Amul, Mother dairy have increased the price of milk and have stated reason as to why.
Did you realise this morning that you were paying more than usual when you purchased milk? That’s because Gujarat Cooperative Milk Marketing Federation (GCMMF), the dairy giant that markets milk and milk products under the brand name ‘Amul’, decided to raise retail milk prices on Tuesday, August 16. Mother Dairy has already raised the price of milk in Delhi-NCR by the same quantum as Amul. The milk prices have increased by Rs 2 per litre, or 4 per cent and the revised prices got affected from today, Wednesday, August 17.
But why has milk become more expensive? Let’s find out!
How much has Amul raised the retail price of milk, and why?
According to Amul's official press release dated Tuesday, the company has chosen to raise the retail price of fresh milk by Rs. 2 per litre nationwide, and the rise will take effect on August 17. The price of Amul Gold will be Rs 31 per 500 ml, Amul Taaza will be sold at Rs 25 per 500 ml, and Amul Shakti will be at Rs 28 per 500 ml.
Amul said in the release that the price rise affected in the MRP is 4 percent — which is lower than the prevailing rate of inflation. “This price hike is being done due to increase in overall cost of operation and production of milk. The cattle feeding cost alone has increased to approximate 20% compare to last year. Considering the rise in input costs, our member unions have also increased farmers’ price in the range of 8-9% over previous year,” the release said.
Dasarath Mane, chairman and managing director of Sonai, blamed the paucity in milk collection for the price rise. “Our dairy is now reporting collection of 20 lakh litres of milk per day. Last August, the collection was around 23 lakh litres per day. This shortfall is the main reason why we have raised our prices,” Mane said.
He said, “dairies across the country are reporting a shortfall of 8-10 percent in milk collection. This decrease has come even though the rainy season is in full swing, which should ideally allow for easy and abundant availability of green fodder. But things have not quite turned out that way”, Mane said.
“The continuous and heavy rain in most parts of the country has resulted in lower yields of green fodder. Protein and mineral mixtures have also seen a price rise, which has increased the cost of cattle feed,” he said. The overall effect of these price rises has resulted in lower milk yields and collection at the dairies.
Furthermore, some major milk-producing regions like Gujarat have observed an upsurge in the number of cattle infections as a result of the nonstop rain. Mane claimed that the lumpy skin illness has become a significant issue in Gujarat and has had an impact on the state's milk collection. “The supply-demand mismatch has resulted in dairies raising their retail prices,” he said.
According to Rajiv Mitra, CEO of the French dairy behemoth Lactalis Prabhat, their daily milk collection in Maharashtra has decreased by 10%. The dairy currently collects 10 lakh litres of milk each day. Mitra noted the price of cattle feed and other charges, just like other dairy businesses.
“Cost of production of milk has gone up compared to the previous year. Cattle feed cost alone has gone up by over 25 per cent. Also, cost of operations has gone up. There is a rise in transport, logistics, manpower, and energy costs. Because of the rise in input costs, milk procurement rates have increased by 15-25% over the same time last year,” he said.
What's the future outlook for milk prices?
The majority of dairies have discussed additional milk price increases before the flush season starts in October. Due to the abundant access to green food and water, animals in the dairy sector naturally produce more milk during the flush season. “Till the flush starts, we can see price bumps in the retail and procurement markets,” said a private dairy owner from Maharashtra.
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 "Explained: Why Amul, Mother Dairy have raised milk prices?")
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