Why prices been increased?

• In a significant move Mother Dairy announced to increase the price of milk in Delhi-NCR market from 3rd June by Rs 2 per litre following the footsteps of its competitor, Amul. The dairy has increased the price of full-cream milk by Rs 2 to Rs 66 per litre, while toned milk rate has been revised to Rs 53 per litre from Rs 51 per litre.
• Amul is one of the leading daily milk suppliers in Delhi NCR and with volumes touching 30lakh litres per day and this is the fifth time their prices have been increased.
• Amul justified the price hike to increased input cost over a period of last 15 months and also to enhance the company’s procurement cost of raw milk from dairy farmers.
• Raw milk is available at a cost which is 24% higher as compared to last year due to the severe heat condition and increased input costs.
• Since 2022, prices of milk have increased. Post pandemic when the hotels and restaurants reopened there was an increased demand in milk and dairy products while the herds were reduced leading to a sharp rise in cattle feed prices.
• The price hikes were induced by higher fodder costs, robust demand, and some impact due to reports of lumpy skin.

Opposition blasts

• In February, Congress slammed the centre for Amul price hike when prices were jacked in all states except Gujarat. Congress took a dg saying Modi and Shah might not be consuming milk!
• Mil traders have expressed resentment saying that this hike will impact the household budget.
• Increased milk prices may lead to price jump in related products like ghee, paneer and butter which will pinch the middle-class pocket to a great extent.

Editor’s Note

• The dairy industry has been struggling with cost inflation, which is largely due to intrinsic challenges such as changing weather patterns and issues that impacted cattle over the last year. This has led to an adverse impact on milk production. Announcement of hike in milk prices came soon after the election got over. Petrol may be the next to be hiked after election results.