supplies drop by around 15-20% with the onset of summers, dairies
are likely to review milk prices
Summers are the lean months for milk production, and as such supplies
fall around this time every year. This year, it is coupled with rising fodder
and cattlefeed costs owing to drought like situation in many parts of the country. Moreover, the commodity prices
and skimmed milk powder) have started firming up after remaining stable
for a long time. Dairies thus are under pressure to raise the
procurement prices to farmers to boost production, and as such a review
of the retail milk prices is likely around first week of May.
R S Sodhi, managing director of the country's largest dairy cooperative
Gujarat Cooperative Milk Marketing Federation (GCMMF) said, “Commodity
prices that were down last year, have started firming up since the last
fifteen days or so. Already fat and ghee prices are up by Rs 40 per kg
while skimmed milk powder (SMP) prices are up in the range of Rs 15-20
per kg. Add to this, cattlefeed prices are up 15%, so are fodder prices
on account of fodder shortage in the country."
Sodhi further claimed that procurement of milk is down by 15-20% on an
average across the country, except Gujarat. "In Gujarat, supplies are up
by 10%. This is because we have already paid the highest procurement
prices in the country," he added. GCMMF procures around 15-20% of its
milk from outside Gujarat. The federation procures about 18 million
litres of milk per day on the whole.
Gujarat farmers are getting around 8-10% higher milk prices every year,
and this is higher than what farmers in the neighbouring states get.
Average procurement prices here around around Rs 650 per kg fat.
Maharashtra is facing the biggest crisis as such when it came to milk
supplies, and this is primarily because of the drought situation.
Maharashtra is the seventh largest milk producing state in India. In cow
milk production, Maharashtra is ranked fourth in India accounting for
around 8% of cow milk produced in India.
One of the leading private dairies in the region, Parag Milk Foods said
that it has already raised procurement prices to farmers. Devendra
Shah, chairman and managing director of Parag Milk Foods said, "At Parag
Milk Foods, we have already increased the procurement costs to farmers
by 10%.The input costs of fodder has witnessed a significant increase by
15-20%." Shah agreed that milk price review is an ongoing process
depending on the season.
In comparison, Tamil Nadu seems to be in a better position as it
received a good rainfall during the north-east monsoons. "We are already
paying more to farmers at Rs 26 per litre compared what they are
getting in states like Maharashtra where it is as low as Rs 18 per
litre. Hence, we do not have a supply crisis as of now," informed R G
Chandramogan, managing director of Hatsun Agro. He added that SMP prices
have started firming up in the international market, and this would
powder prices here too would rise. However, Chandramogan is hopeful that
if monsoons set in time, the fodder scarcity situation might improve.