Amul hikes milk prices by ₹2/litre amid rising cost

Ahmedabad, Feb 28: Dairy cooperative major Gujarat Cooperative Milk Marketing Federation Limited (GCMMF), the marketer of Amul milk on Monday announced upward revision in fresh Amul milk prices by ₹2 per litre.

The price-rise will be applicable to fresh liquid milk sold in pouches under the brands of Amul Gold, Amul Tazaa, Amul Shakti.

"This price hike is being done due to rise in costs of energy, packaging, logistics, cattle feeding cost thus overall cost of operation and production of milk has increased," GCMMF said in a statement on Monday.

The price hike will be effective March 1 across the country, where Amul markets its fresh milk.

"In Ahmedabad and Saurashtra markets of Gujarat, the price of Amul Gold will be ₹30 per 500 ml, Amul Taaza will be ₹24 per 500 ml, and Amul Shakti will be at ₹27 per 500ml," it said.

According to Amul statement, the price hike of ₹2 per litre translates into 4 per cent increase in the Maximum Retail Price (MRP), which is much lower than average food inflation.

"It is worthwhile to note that in the last 2 years Amul has made only 4 per cent increase per annum in prices of its fresh milk category," it said.

"Considering the rise in input costs, our member unions have also increased farmers’ price in the range of ₹35 to ₹40 per kg fat which is more than 5 per cent over previous year," the statement added.

The dairy cooperative follows a policy to pass-on almost 80 paise of every rupee paid by consumers to the milk producers.

"The price revision shall help in sustaining remunerative milk prices to our milk producers and to encourage them for higher milk production," the dairy major said.

Higher input costs

Meanwhile, towards the end of the year 2021, dairy players had anticipated a price rise in the dairy products during the year 2022 following the higher input costs.

Notably, the increase in raw material cost for cattle-feed has been very steep at more than 40 per cent in past one year. Similarly, packaging material costs for polyfilm have gone up by about 30-35 per cent.

The Covid-19-hit years of 2020 and 2021 saw excess milk supplies at the dairies, but the farm-gate prices didn't lift as the bulk demand from hotels, restaurants and cafes had remained subdued. As a result, experts had noted that the dairy producers had to face cost pressure without any gain on the prices.

The dairy experts had maintained that the milk inflation remained barely two per cent annually over the past two years as against about 25 per cent jump in prices of edible oils and other protein/fat sources.

COMMENT NOW