Amul hikes milk prices as production cost rises

India’s largest milk co-operative Amul on Thursday hiked prices in the Delhi-National Capital Region by up to ₹2 a litre, which will be followed by a hike in Gujarat by Saturday.

Citing the increase in production cost, the company said it will increase prices in other regions of the country over the next 7-10 days. Other dairy players may follow suit.

RS Sodhi, MD, Gujarat Cooperative Milk Marketing Federation, which markets Amul, said: “We are taking a price hike of about 4 per cent, which we are doing after nearly 25 months. The cost of production for the farmers, which on an average has gone up by 20 per cent, as well as the pressure of inflation, has led us to increase milk prices.”

He added, “We are increasing prices in Delhi-NCR from Friday and in Gujarat by Saturday. In the rest of the regions we will increase prices in the next 7-10 days.”

In Delhi-NCR, the company will be raising prices by ₹1 on one litre and half-litre packs.

The toned one-litre polypack, which was priced at ₹38, will now cost ₹39, while the half-litre pack, which costs ₹19, will now cost ₹20. Amul sells around 30 lakh litres of milk in Delhi NCR accounting for about 40 per cent of the pouched milk sales in the region. GCMMF’s estimated average milk procurement stands in the range of 180 lakh litres/day (LLPD), which is down by 35 LLPD or 16 per cent from the peak procurement of 215 LLPD in early January.

Meanwhile, a Mother Dairy spokesperson said it was not increasing the prices for now. “Though farmer prices have been increasing over the past three months by about ₹2.50/kg — due to environmental temperature, summer and season demand — Mother Dairy has been able to absorb the impact. The prices are likely to go up further in coming months. We are keeping a close watch on milk availability and the price situation and may take a call on consumer prices if the situation warrants,” a Mother Dairy statement read.

A senior executive with Kwality Ltd said the company may look at following Amul and will debate the decision internally.

Conditions of drought and heat wave across the key milk producing regions of Maharashtra, Gujarat, Uttar Pradesh and Rajasthan have led to a drop in milk procurement. In key milk producing regions, the decline ranges from 20-50 per cent across these States.