July 5, 2011
India's milk prices unlikely to increase currently
Indian milk prices, which have increased by threefold in the last two years, are unlikely to increase soon as there has been a significant rise in output of milk and milk products, said top producers.
Dairy giants Amul and Mother Dairy said that they did not see any price increase in the near future.
"There has been an over 10-12% increase in the demand for milk this season, but simultaneously production has been high too, in Kolkata, Punjab, Karnataka and other states in the south. There was a 6-8% increase in the price of milk in May, but in the next three to four months, there will not be any further increase," Mother Dairy MD S Nagarajan said,
A recent study by ratings agency, Crisil, showed that prices of fruits, vegetables, meat, milk witnessed double-digit inflation. Inflation in eggs, meat and fish averaged 23.6% in 2010-11, while inflation in milk stood at 19.7%.
It said as disposable incomes rise, consumer preferences have been shifting towards "protein-based" food items such as eggs, meat, fish and milk from traditional food items such as foodgrains and cereals, thereby pushing up prices of protein based commodities.
"We increased butter prices a month ago as we had raised price paid to the milkmen due to high inflation. However, the situation will be better as we expect a 10% increase in procurement of milk by the end of July," R S Sodhi, Amul MD said. Amul, which has a market share of over 90% in the dairy segment, witnessed a growth of 6-8% in dairy production.
"With good monsoons and bumper agri crops expected during the year, we see prices stabilising in the remainder of the year," Parag Milk Foods managing director Devendra Shah said.
Shah's firm has also witnessed nearly 20% growth in production. But most of the producers said that they have seen a steady increase in demand as well.
