Agri Business

Don’t see hike in dairy prices in next 12-18 months: Raj Kanwar

K V Kurmanath Hyderabad | Updated on October 17, 2019 Published on October 17, 2019

Increase in cost of labour and raw material added to the overheads for the dairy farmers. File Photo   -  BusinessLine

Milk production might see a dip by 5-6 per cent due to erratic rains

Milk procurement and retail prices across the country have risen in the last few weeks. The price increase ranges from Rs 5-8 a litre in different States, while the increase in retail prices is put at Rs 5-6 a litre in the last three to four months.

Despite a surplus situation last year, prices have gone up, while farmers contend that they are not getting remunerative prices. Increase in cost of labour and raw material too added to the overheads of dairy farmers, which led to a rise in procurement costs. The industry has passed on part of this burden to consumers.

Also read: Why is milk getting costlier?

In an interview to BusinessLine, Raj Kanwar, Chief Executive Officer of Godrej Group company Creamline Dairy Products Limited, said that the dairy industry is growing at 5-6 per cent, largely driven by growing urbanisation and increase in awareness on the importance of consuming dairy products.

“The time-poor money-rich urban population has realised the importance of having value-added dairy products on their menu. This is helping the industry to grow,” Raj Kanwar said.

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Asked about the rise in prices for retail consumers, he said that the industry is witnessing correction as the cost of production for farmers goes up.

“This year, we expect lower production of milk by 5-6 per cent due to erratic rains, which led to a shortage of fodder,” he said.

He, however, felt that the price correction for the current cycle has been completed. “We do not expect a price rise in the next 12-18 months,” he said.

Godrej Agrovet acquired a majority stake in 2015 in Hyderabad-based Creamline Dairy, which has strong presence in the Southern states of Tamil Nadu, Karnataka, Telangana and Andhra Pradesh. With about 100 chilling centres and 10 dairy plants, it has a total processing capacity of about 1.36 million litres a day.

“We have recently opened a processing plant at Visakhapatnam to cater to the demand in Srikakulam, Vizianagaram and Visakhapatnam districts,” the Creamline Dairy CEO said.



Production (Million Tonnes)

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(Source: National Dairy Board)

Published on October 17, 2019
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