Amul, Mother Dairy hike milk prices by Rs 2 per litre, say current prices still below average food inflation

Consumers can expect more hikes soon

Chaya UnnikrishnanUpdated: Tuesday, August 16, 2022, 11:27 PM IST
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Amul, Mother Dairy hike milk prices by Rs 2 per litre, say current prices still below average food inflation | File

Top dairy companies – Amul and Mother Dairy – have announced a price hike of Rs 2 per litre of milk from Wednesday (August 17) due to rising input costs. It translates into a 4 per cent increase in maximum retail price.

After the revision, Amul Gold in Ahmedabad and Saurashtra markets will be Rs31 per 500ml, Amul Taaza will be Rs25 per 500ml, and Amul Shakti will cost Rs28 per 500ml.

Indicating a possibility for further hikes in milk and milk product prices by other companies as well, industry sources said that the currently announced increase of Rs2 per litre is still lower than average food inflation.

A Mother Dairy spokesperson said in a statement, “This price hike is due to an increase in the overall cost of operation and production of milk.” He added that the cattle feed alone costs approximately 20 per cent more than last year. “Considering the rise in these input costs, our member unions have also increased farmers’ prices in the range of 8-9 per cent over the previous year,” the spokesperson added.

Explaining the cost structure in dairy manufacturing companies such as GCMMF (the parent firm of the dairy brand Amul), the company spokesperson said that it passes almost 80 paise of every rupee paid by consumers for milk and milk products to producers.

“The price revision will help in sustaining remunerative milk prices and encourage higher milk production,” the GCMMF spokesperson added.

The milk producing societies and dairy companies, according to industry sources, have been experiencing a surge in input costs which have increased multifold in the last five months.

They added that the farm prices of raw milk have alone firmed up by about 10-11 per cent in the said period. Likewise, the cost of feed and fodder has also witnessed a significant rise during the same time due to the heatwave observed earlier in the country, and on account of the extended summer season, sources said.

The Mother Dairy statement on Tuesday claimed that the surge in farm prices is only being partially passed on to consumers, thereby securing the interests of both the stakeholders – consumers and farmers.

“As a responsible organisation, Mother Dairy has consistently worked towards providing remunerative prices to milk producers, thereby ensuring the sustainability of dairying and availability of quality milk,” the statement said.

Mother Dairy too passes around 75-80 per cent of the sales realisation from milk towards the procurement of milk. Other leading milk and dairy-based product manufacturers in the country include, Creamline Dairy Products (Jersey Dairy), KSE, Parag Milk Foods, Karnataka Co-operative Milk Producers Federation Ltd (Nandini), Mehsana District Co-operative Milk Producers Union Ltd (Dudhsagar Dairy), Gujarat Cooperative Milk Marketing Federation (Amul India), Schreiber Dynamix Dairies, Tamilnadu Co-operative Milk Producers Federation, The Kerala Cooperative Milk Marketing Federation (Milma).

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