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Amul increases milk price ; Mahananda and Mother Dairy may follow soon
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Wednesday, 16 October, 2013, 08 : 00 AM [IST]
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Abhitash Singh, Mumbai and Ashwani Maindola, New Delhi
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fiogf49gjkf0d While Amul has increased the price of its milk offerings by Rs 2 in Mumbai as well as in the National Capital Region (NCR) with effect from Tuesday, leading dairy companies like Mother Dairy and Mahananda are also planning to effect a rise in rates in the coming days.
Speaking about the hike to FnB News, R S Sodhi, MD, Gujarat Co-operative Milk Marketing Federation (GCMMF), said, “The increase in the price of milk was necessary because of the increase in overall costs including food inflation and cattle feed. The food inflation reached around 18 per cent this year and the cattle feed prices increased by 15 per cent while the milk prices have been increased only by 10 per cent with the latest hike.”
Amul is the largest milk producer in the country with average milk procurement of over 11.5 million litre per day and sells 3.5 million litre of milk daily in Delhi and Mumbai markets.
After the increase in the milk price of Amul, Amul Gold (full cream) milk will cost Rs 44 a litre, compared to the current price of Rs 42, while Amul Taza (toned milk) will cost Rs 34 a litre, up from the current price Rs 32. The new price of Amul Slim and Trim double toned milk will be Rs 30 a litre, compared to the existing price of Rs 28.
Mother Dairy has indicated that a price rise is imminent in coming days. The company, in a statement, mentioned that it was closely following the procurement and raw material prices and there might be a review, if required.
"At Mother Dairy, we strongly follow our value that the farmers should get their fair share and the consumers’ interests are also maintained. We are keeping a close watch on the procurement prices as well as the raw material prices and input costs that affect the farmers and will review our consumer prices of milk if required," stated a spokesperson of Mother Dairy.
Meanwhile, Mahananda Dairy is expected to take decision on hike at a meeting that would be held this week.
Vikas Agnihotri, general manager, Mahananda Dairy, said, “Yes, we are aware that Amul has increased milk prices by Rs 2 in Mumbai and Delhi respectively with effect from 15th October 2013. But we are not in a hurry to increase the price.”
He added, “I can't reveal the decision right now. We will be holding the board meeting in this week or next week and will decide about further action. The decision is at initial stages.”
Parag Milk’s chairman Devendra Shah informed, “During the last year, Indian milk prices were depressed with ample supply of raw milk and depressed demand. However, the situation started improving for the better in recent months, led by tightening of supplies and rising prices in international markets for dairy commodities. Further, with increasing exchange rate of US dollar against Indian rupee over last two months, Indian dairy commodities, mainly skimmed milk powder have found favour with global buyers due to attractive rates in such tight situation and Indian exporters have started realising better prices. With supply situation of milk in the country constrained over last 2 months due to lean season and demand increasing domestically as well due to start of festival season with Eid, Shravan, Ganesh, Navratri & Diwali; dairies have been forced to pay much higher prices to milk producers to maintain supplies.”
He added, “Over the last 2 weeks, we have increased raw milk procurement prices paid to farmers by Rs 2.5-3 per litre of cow milk in Maharashtra and if the current situation continues, we shall have to further increase the procurement prices to maintain the milk inflow, with increasing US dollar exchange rate, major dairy players in Maharashtra are currently realising prices of skimmed milk powder to the tune of Rs 215-225/kg as against realisations of Rs 170-180/kg a few days back. Increasing prices of imported raw material & packaging material as well as diesel prices are adding fire to this increase in milk cost paid to farmers.”
He observed, “While the situation is very good for milk producers, it is alarming for inflation and viability of the industry. We are expecting some steps from the government to help the dairies sail through this difficult time where milk producers are paid handsomely and consumers are not impacted with exchange rate fluctuations. For dairy players like us, who are much more focussed on the domestic market with well-developed distribution network and consumer brands, we have to protect the interests of both milk producers and consumers. We cannot take short-term view of volatile export commodity market and rupee depreciation only.”
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