January 31, 2012

India's DDC raises milk price

India's Dairy Development Corporation (DDC) has raised the price of pasteurised milk by INR2 (US$0.04) and INR3 (US$0.06) per half-litre pack of milk with effect from Tuesday (Jan 24).

It has also decided to raise the procurement price of fresh milk in the range of INR2.60 (US$0.05) to INR4 (US$0.08) per litre.

The rise in procurement price of fresh milk comes amid reports that farmers are reluctant to expand their milk business as costs are rising while there are hardly any new incentives from DDC or the government.

General Manager of DDC Siya Ram Singh told that a half-litre blue and green packet of milk will cost INR24 (US$0.48) and INR28 (US$0.56) respectively in the Kathmandu valley, Biratnagar and Hetauda. However, the same milk would be available for INR23 (US$0.46) and INR27 (US$0.54) for the two varieties of milk packs respectively for other areas.

"Keeping in view the mounting pressure from farmers, we have decided to raise the procurement price of fresh milk by INR2.60-4 (US$0.05-0.08) per litre to INR32-35 (US$0.64-0.71) per litre, depending on Fat and Solids not Fat (SNF) of the milk," Singh told on Monday. Singh also informed that DDC is preparing to raise the price of other milk products such as cheese, butter, curd, ghee, sweets, paneer, among others, following the rise in fresh milk price.

DDC has been procuring daily 250,000 litres of fresh milk from farmers through Milk Supply Schemes (MSS) in 42 districts across the country. The MMS under the DDC milk supply network are located in Dhangadi, Nepalgunj, Butwal, Hetauda, Janakpur, Biratnagar and Kathmandu.

Over 790 Milk Producers Cooperative Societies (MPCSs) operated by farmers are supplying milk to over 60 chilling centres of DDC. "Out of the total 250,000 litres of milk collected across the country, we have been distributing at least 135,000 litres in the capital alone," Singh said.

In a bid to ease the rising deficit of milk in the market, DDC has been importing daily 30,000 litres of fresh milk from Patna in Bihar for last some months. DDC had raised the price by INR2 (US$0.04) and INR3 (US$0.06) per half-litre package packet depending on the variety of milk.