Milk prices in the city look set to head further north this summer. Scarcity of raw milk coupled with a surge in the price of skimmed milk powder may lead to another round of hike in prices from April, traditionally the beginning of the lean period for raw milk production. The rise could be in the magnitude of 10%-15%, say, industry insiders. Milk prices in Kolkata went up by Rs 5-6 in the first week of December, with toned and double toned milk selling in the range of Rs 40-43 per litre.
Eastern India, particularly Bengal, is a deficit in raw milk and is largely dependent on skimmed milk powder to keep the supply flowing. Most leading dairies in the state use skimmed milk powder to make up for the deficit in raw milk. However, there has been a 100% rise in the price of skimmed milk powder over the past three months.
“The price initially went up from Rs 150/kg to Rs 350/kg but has now settled at Rs 300/kg. Most dairies have already revised prices by Rs 5-6 but are still incurring losses,” an industry veteran said. He pointed out that April-October is the lean period for raw milk production in the east and northeast, which is why high rates of skimmed milk powder will affect the region more.
Interestingly, the global price of skimmed milk powder is down to Rs 200 following reduced demand in China in the wake of the coronavirus outbreak. But the Centre has so far not allowed import. Amul, a cooperative brand managed by the Gujarat Co-operative Milk Marketing Federation, is the biggest supplier of skimmed milk powder in India and is reportedly not in favour of import.
Mayank Jalan, CMD of Keventer Group that owns Metro Dairy, said: “Due to erratic weather conditions we are facing an acute shortage of skimmed milk powder and prices have more than doubled in the last four months. It is critical in this time of shortage for the government to allow a limited quantity of import for a limited period of time. This will ensure price stability.”
Pradip Mitra, general secretary of Mother Dairy (Calcutta) employees’ union, said the company is struggling to keep productions at an optimum level. The state-controlled company was the only one to refrain from hiking prices in December. “Our prices are much lower than that of competitors. We have asked the management to bring the prices at par with the competition,” Mitra said.
ITC, which has recently forayed into fresh dairy in Kolkata, also admitted that availability of fresh milk is a challenge. “Our agri business division is currently working with farmers in Bengal to improve milk yields and our focus is on strengthening and scaling up the supply chain to ensure availability of fresh milk, which is currently a challenge for the entire industry,” a spokesperson for the company said.
Amul, Metro Dairy, Mother Dairy, Red Cow, ITC are among the major players in the Kolkata milk market, with Amul being the leader.
“Allowing imports of 50,000-1,00,000MT of skimmed milk powder at the prevailing international rate of Rs 200/kg can help regulate the price of the powder in the domestic market,” said a National Dairy Development Board official.