Amul, Mother Diary hike milk prices by Rs 2 due to rise in procurement cost

Popular milk brands Amul and Mother Dairy have decided to raise their milk prices by Rs 2 per litre from Wednesday to compensate for the increase in procurement costs.

The hike -- which comes days before Janmashtami celebrations and months ahead of the flush season when milk supplies usually rise -- may impact household budgets because milk is one of the most widely consumed items.

For dairy companies, milk procurement costs have risen due to the increase in feed meal rates for farmers. In the case of milk, 70-80 per cent of the price that a consumer pays is directly passed on to farmers as purchase price.

According to Mother Dairy, in the past five months, farm prices of raw milk have alone firmed up by 10-11 per cent, while the cost of feed and fodder has witnessed a significant rise due to the heatwave observed earlier in the country and on account of the extended summer season.

Last time Mother Dairy raised prices was in March when it increased milk prices by Rs 2 per litre in Delhi-NCR (National Capital Region). Mother Dairy is one of the leading milk suppliers in the Delhi-NCR market and sells more than 3 million litres per day in poly packs and through vending machines.

After the hike, full cream milk shall cost Rs 61 a litre, up from Rs 59 per litre. The price of toned milk will increase to Rs 51, while that of double-toned milk will jump to Rs 45 per litre. The cow milk price has been hiked to Rs 53 per litre.

The bulk-vended milk (token milk) price has been raised to Rs 48, from Rs 46 per litre.

Gujarat Cooperative Milk Marketing Federation (GCMMF), which markets its dairy products under the Amul brand, also increased the prices of its Gold, Taaza and Shakti milk brands by Rs 2 per litre.

The new prices will be applicable in Gujarat, Delhi-NCR, West Bengal, Mumbai, and other markets where Amul is marketing its fresh milk, the GCMMF said in a statement.

The hike of Rs 2 per litre translates into a 4 per cent increase in MRP, which is lower than the average food inflation, the company added.

In the Ahmedabad and Saurashtra markets, now the price of 500 ml of Amul Gold will be Rs 31, Amul Taaza will be Rs 25, and Amul Shakti shall be Rs 28.

"The cattle feeding cost alone has increased by approximately 20 per cent over last year. Considering the rise in input costs, our member unions have also increased farmers' prices in the range of 8-9 per cent over the previous year," Amul said.