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Explained: Why Milk Prices Have Been Hiked?

Business Today 1

Milk prices are all set to increase as leading milk suppliers Amul and Mother Dairy have announced a price hike of rupees 2 per liter on account of rising input costs.

This is the second hike in six months by both the brands. Earlier in March, both had increased the milk prices by ₹2 per liter.

The Amul brand, owned by the Gujarat Cooperative Milk Marketing Federation (GCMMF) on Tuesday said that it has decided to increase the milk prices by rupees 2 per liter in Ahmedabad and Saurashtra of Gujarat, Delhi-NCR, West Bengal, Mumbai, and other markets effective from August 17.

Amul Hikes Milk Prices Again City-Wise New Rates Here


The 2 rupees hike will lead to a four percent increase in MRP (Maximum Retail Price) which is lower than the average food inflation, it said in a statement.

“This price hike is being done due to increase in overall cost of operation and production of milk. The cattle feeding cost alone has increased to approximately 20% compare to last year,” the GCMMF said. Almost 80 paise of every rupee paid by consumers for milk and milk products to the milk producers have been passed by the cooperative.

The price revision would help in sustaining remunerative milk prices to our milk producers and encourage them for higher milk production, the GCMMF said. Meanwhile, Mother Dairy has also announced that it will hike milk prices in the Delhi-NCR (National Capital Region) by rupees 2 per liter from Wednesday.

Mother Dairy is a leading milk supplier in the Delhi-NCR market and sells more than 30 lakh liters per day in poly packs and through vending machines. On Tuesday, a company official said that it is “compelled” to raise its liquid milk prices by ₹2 per liter with effect from August 17, 2022. The new prices will be applicable for all milk variants.

Full cream milk will cost rupees 61 per liter from Wednesday, up from rupees 59 per liter. Prices of toned milk will increase to rupees 51 while double-toned milk will rise to rupees 45 per liter. Cow milk prices have been hiked to rupees 53 per liter.

Bulk vended milk or token milk price has been raised to rupees 48 from rupees46 per liter. The company has seen an increase in input costs over the last five months. For instance, the farm prices of raw milk have spiked by about 10-11 percent.

Similarly, the cost of feed and fodder has also witnessed a significant rise due to the heat wave and the extended summer season. The official said that the surge in farm prices is only being partially passed on to the consumers, thereby securing the interests of both the stakeholders – consumers and farmers.

Around 75-80 percent of the sales realisation from milk is spent by the company on the procurement of milk from the farmers.

Meanwhile, for Amul, full cream milk will be available at ₹62 per liter in Ahmedabad, Kolkata, Delhi-NCR, and Mumbai. Toned milk will be sold at ₹50 in Ahmedabad and ₹52 each in the remaining three markets.

GCMMF sells more than 150 lakh liters of milk per day and out of the total quantity, and Delhi-NCR accounts for nearly 40 lakh liters per day. India stands as the world’s largest milk producer.

References: LiveMint, Indian Express, Twitter

Featured Image Source: Business Today

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