Following India’s completion of the monumental 18th Lok Sabha elections, a surge in prices emerged notably in milk and tolls. The nation’s top two milk cooperatives, Amul and Mother Dairy, have announced a Rs 2 increase in their milk prices, effective June 3. Consequently, the full cream variants of Mother Dairy and Amul, previously priced at Rs 66 per litre in 2023, will now be priced at Rs 68 per litre.
Soon after India completed voting for the biggest electoral exercise – 18th Lok Sabha elections, prices of milk and tolls went higher. India’s two biggest milk cooperatives, Amul and Mother Dairy, have hiked their milk prices by Rs 2, effective June 3.
Mother Dairy, based in Noida, attributed its price hike to rising production costs over the past year. “The increase in consumer price is mainly to compensate the producers for increased production costs, which have been on the rise for over one year,” the company added.
Additionally, the Gujarat Cooperative Milk Marketing Federation (GCMMF), which markets milk and milk products under the brand name Amul, announced a price increase of approximately Rs 2 per litre.
Milk prices seeing too many hikes
If prices for 2023 were to be compared with the new prices, Mother Dairy’s full cream and Amul’s full cream milk (Gold) will now cost you Rs 68. A year ago, the price of the said variant of both the companies carried a price tag of Rs 66 per litre.
In the past two years, leading milk suppliers like Amul and Mother Dairy have hiked prices of milk multiple times, citing increasing procurement costs of milk from farmers. For instance, Mother Dairy has increased milk prices by Rs 10 per litre between March and December 2022.
In 2022, Amul hiked its prices thrice while Mother Dairy had done several rounds of price revision. The last hike by Amul in 2022 was in October when it hiked its prices by Rs 2. While in the case of mother dairy, the last hike was in December by Rs 2.’
The major reason for multiple price hikes in 2022 were attributed to milk production remaining stagnant in the fiscal 2023 due to lumpy skin disease in cattle, said India’s Animal Husbandry and Dairy Secretary Rajesh Kumar Singh.
For the last month, India’s retail inflation eased marginally to hit 11-month low of 4.83 per cent on an annual basis in April as against 4.85 per cent in the previous month, the official data showed. Vegetable inflation stood at 27.80 per cent year-on-year as against 28.30 per cent in March. In all, milk weighs nearly 6.61 per cent of Consumer Price Index (CPI). In its annual report, the Reserve Bank of India said the increased prices in the food and beverages (F&B) category have been a major driver of India’s inflation in FY24. F&B’s contribution to the headline inflation was 60.3% in FY24, up from 46% a year ago.
The RBI sees CPI inflation easing to 4.5% in 2024-25.
Heatwave to turn milk production sour?
Heatwave conditions in several parts of the country are expected to further impact milk production in the country. “Despite higher milk procurement costs in recent months, consumer prices were maintained, but the unprecedented heat stress across the country is expected to further impact milk production,” said Mother Dairy.
Heatwave conditions have been recorded in various states across the east, north, and southern regions, with temperatures exceeding 45 degrees Celsius in some areas.
In India, dairy is the single largest agricultural commodity, contributing 5 per cent to the national economy and directly employing more than 8 crore farmers. India’s prominence in the dairy sector is national and global, as it ranks first in milk production, contributing 25 percent to the world’s total milk output.
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