Even as agriculture minister Sharad Pawar has declined that he indicated a possible rise in milk prices because of demand-supply mismatch, major milk retailers like Amul and Delhi?s Mother Dairy have hinted at a gradual rise in product prices.
R S Sodhi, chief general manger of Gujarat Cooperative Milk Marketing Federation, the markers of Amul, said, ?We have increased prices gradually whenever required. With further pressure on costing we may gradually increase prices again in the future.?
Industry officials said fodder price has escalated by 30% during the last one year putting farmers and dairy companies at a disadvantage.
The cost of major inputs for cattle feed like de-oiled rice bran cake, rice polish fine, jowar, maize and molasses have gone up by around 30% in the last one year, industry official said.
?Compared to 2008, price of de-oiled rice bran has gone up by 21%, rapeseed extraction (28%), rice polish fine (12%), jowar (19%),? industry official said.
They added that price of molasses, which was at Rs 8,602 per tonnes in July 2009 has risen by 143% in the last three years and up almost 37% from 2008 when the price was quoting at Rs 6,288 per tonne. While not ruling out a hike in price outright a spokesperson for Mother Dairy said, ?We are studying the situation and analysing the same.?
For Mother Dairy, officials said a big part of the problem is drop in milk procurement and increase in purchase price, which does not confront Amul that much as the cooperative procures milk mainly from western parts of the country.
Experts said as the peak period for milk procurement starts from November and ends in February, so, the impact of the shortage could be more pronounced during April-June period. ?Liquid milk is a low margin product unlike other value added products, so it can take cost hike upto a point and beyond that the price has to be increased. Since milk is a very sensitive commodity, the price hike may take place after a lot of debate and discussion?, Reshmi Upadhya, managing consultant, PWC said.