Milk price to increase in northern India on low supplies

Northern India is facing a severe shortage of milk supplies, which as a result may cause milk prices to increase soon.

Agriculture minister Sharad Pawar said there is a gap of 1.8 million tonnes between demand and the current milk supply. The minister also noted there is a demand for price hikes.

It is up to the states to decide on the demand for price increases to ensure milk procurement, and no state has demanded a price hike, he said, adding that some states which raised milk prices three to four months ago reported of better supply.

In Delhi, key branded milk suppliers such as Amul and Mother Dairy had raised prices of all varieties by Rs1-2 (US$0.02-US$0.04) per litre few months and there is expectation that they may gain raise prices again due to higher purchase price.

Milk sold by private dairy traders in the national capital has reached about Rs32 (US$0.7) a litre. India produced more than 108.5 million tonnes of milk last year, but demand is projected to reach 166 million tonnes by 2020.