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Milk turning dearer

Harish Damodaran

New Delhi, Aug. 9 Even as consumers are reconciling themselves to dearer sugar, they are being served a double whammy – this time from milk.

The last few days have seen retail milk prices go up by Rs 1-2 a litre in Delhi, Mumbai and Pune, with other cities, too, bracing for similar increases.

Coming ahead of the festival season – starting with Eid-ul-Fitr towards September 20, followed by Dussehra on September 28 and Diwali on October 17 – there could be no worse news, given that these two commodities or their derivatives such as khoa and channa are the main ingredients in the making of practically every sweet savoured during this time.

In Mumbai, all major liquid milk brands – Mahananda, Aarey, Gokul, Amul, Mother Dairy, Warana, Krishna, Govardhan, Shivamrut and Govind – have announced Rs 2 a litre hike effective from this Friday.

Full-cream milk, with six per cent fat and nine per cent solids-not-fat (SNF) content, will now cost Rs 30 a litre, while prices of toned milk (3 per cent fat and 8.5 per cent SNF) have been raised from Rs 22 to 24 a litre.

In Pune, too, consumer prices have gone up by Rs 2 a litre, as a result of the Maharashtra Government’s decision on July 29 to hike its reference rate for purchase of milk from farmers by Rs 2.50 a litre.

Procurement price hiked

Dairies in the State will have to pay the higher procurement price over the next three months, before the ‘flush’ season begins in November.

In Delhi, the market leader, Mother Dairy, has effected a Re one a litre increase in prices of its double-toned (1.5 per cent fat and 9 per cent SNF) and bulk-vended toned variants.

These will henceforth retail at Rs 19 and Rs 20 a litre respectively, even as prices of full-cream and toned milk sold in pouches (as opposed to loose milk against tokens) have been retained at Rs 21 and Rs 26 a litre.

“Mother Dairy is also likely to shortly raise prices of full-cream and toned milk as well. Given that full-cream in Delhi is now Rs 4 a litre cheaper than in Mumbai, this is bound to happen.

And once the market leader does it, Amul, Gopaljee, Paras and others will automatically follow”, industry sources pointed out.

A Re one a litre consumer price hike is also said to be in the offing in Kolkata.

Pending with EC

In Chennai, the Tamil Nadu Government has already given the clearance for raising procurement prices of milk by Rs 2 a litre, though the decision is pending with the Election Commission in view of the by-elections to five Assembly seats on August 18.

“The higher procurement prices may take effect after the by-polls, which, in turn, will also necessitate a corresponding correction in retail prices”, the sources added.

Milk prices, unlike sugar, have witnessed a gradual increase over the last couple of years.

Gradual rise

While retail sugar prices have shot up from Rs 18-19 to Rs 28-29 a kg in the last one year alone, full-cream milk prices in Delhi have risen from Rs 19 to Rs 26 since February 2006.

Dairies’ defence

Dairies justify the higher milk prices by laying the blame on soaring cattle feed costs, along with the impact of the current drought on green fodder availability.

Prices of major feed ingredients such as de-oiled rice bran, rapeseed extractions and molasses have hardened by 40- 60 per cent since last year.

Moreover, the recent increase in diesel prices has added to the cost of transporting milk from the primary collection centres to the consumer point, they pointed out.
Courtesy : The Hindu Business Line

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