August 16, 2013

Some Indian milk producers to increase price by US$0.03/litre

Four private milk producers in India will increase the price by INR2/litre (US$0.03), a move that will put additional financial burden on households and also force tea stalls to hike the price of the cuppa.

Chennai consumers are expected to feel the pinch most since the city and surrounding areas constitute the major market for the four brands from Andhra Pradesh - Tirumala, Dodla, Heritage and Jersey - whose price will go up from Friday (Aug 16). Sources in the trade said the cost of double toned milk now is INR26/litre (US$0.42), while that of toned milk is INR30 (US$0.50), standardised milk INR34 (US$0.55) and full cream milk INR38 (US$0.61).

Leaders of the Tamil Nadu Milk Dealers Welfare Association (TNMDWA), which opposed the hike, said the four brands together supply around 10-11 lakh (10,000) litres of milk daily to the Chennai market. About 60% of their supplies are to households, while the rest is to commercial establishments, such as tea stalls and hotels, an office bearer said.

Their main market is the city, State president of the Association S.A.Ponnusamy said, adding that the daily milk requirement in Chennai is around 250,000 litres.

Aavin brand milk supplied by the State government sells about 110,000 litres a day, while the rest of the demand is met by private milk producers in Tamil Nadu, he said.

On the association opposing the move, he said unlike in the past the companies did not issue a circular to the dealers. Ponnusamy said the increase in petrol and diesel prices, salaries and electricity charges that were cited by milk producers as reasons for the hike equally impacted the dealers.

Fixing their commission as a percentage would help in times of such increase, he said, adding the association has 15,000 members across the State.