July 2, 2013
Led by Gujarat Cooperative Milk Marketing Federation (GCMMF), India's milk prices rose by INR2 (US$0.03) a litre in the western region from June 24.
This is due to a rise in raw material costs (prices to farmers) by almost 10% over last year, power rates and petroleum prices, among others.
GCMMF, which sells packaged milk under the Amul brand, raised its prices by INR2 (US$0.03) a litre across all categories in Gujarat, following a similar move a month earlier by Delhi-based Mother Dairy. Following the move, many in the non-organisational sector raised milk prices by INR2 (US$0.03) to sell at INR54 (US$0.91) a litre from July 1.
The price of Amul Gold has gone up to INR42 (US$0.71) a litre. For Amul Shakti and Amul Taza, consumers would have to pay INR31 (US$0.52) and INR29 (US$0.49) a litre, respectively.
Effective May 27, Mother Dairy had raised milk prices by INR3 (US$0.05) a litre across varieties.
R S Sodhi, managing director of GCMMF, said, "We had raised milk prices everywhere but in Gujarat, three months ago. We have now taken the price hike to Gujarat as farmers have raised milk prices in the state...we had to pass on the rise of input costs to consumers. However, there is no further room for a price hike in the near future."
"Both input and employee costs have risen sharply in the past one year. Even at this price, milk is non-remunerative. Hence, another round of hike cannot be ruled out in the near future," said Ballibhai Tirji Maradia, president of the Bombay Milk Producers Association.
A log (quintal) of green grass, quoted at INR600 (US$10) three months earlier, has gone up to INR800 (US$13.50). Experts say rain has disrupted its supply. The price of kapas khalli (cotton oilseed cake) has moved up by INR200 (US$3.37) a quintal in the past three months, from INR1,600/quintal (US$27) to INR1,800/quintal (US$30). In addition, all grains used as animal feed have become costlier.
The price of milk generally moves along with that of diesel, albeit in lower proportion. In the past five months, diesel prices have risen 7% to around INR56/litre (US$94) from INR52 (US$0.88) in Maharashtra. Transportation is a major component of overall cost.
GCMMF had raised milk prices by INR2/litre (U$0.03) in north India three months earlier but had not done so in Gujarat. Delhi-based Mother Dairy raised its prices three months earlier in and around the national capital but did not do so in western India. According to an official, the price rise which took effect three months ago was automatically spread across the country.
Another popular local brand, Mahananda, which generally follows Amul and Mother Dairy, is awaiting a decision from its board. "We have not taken a final decision. But we cannot rule out a rise, as animal feed has become costlier," said a company official.
With the rise, the Baroda District Co-operative Milk Producers' Union has decided to pay an additional INR10 /kilogramme (US$0.17) of fat, to INR465 (US$7.80), to its 200,000 milk producers.
