Milk Price Hike Across India: In a development that will impact millions of households across India, major dairy cooperatives and private companies have announced a substantial increase in milk prices, citing rising input costs and supply chain challenges. This marks the second price revision this year, further straining household budgets already under pressure from broader inflationary trends.
Price Increase Details
Amul, India’s largest dairy cooperative, has taken the lead by announcing a ₹2 per liter increase across all milk variants effective from tomorrow. This brings the price of Amul Gold (full cream milk) to ₹68 per liter in Delhi-NCR, while Amul Taaza (toned milk) will now cost ₹54 per liter.
Following Amul’s announcement, Mother Dairy promptly declared an identical price increase for the Delhi-NCR region. Other major players including Nandini in Karnataka, Verka in Punjab, and private companies like Namaste India and Parag have also confirmed similar price adjustments in their respective markets.
“This price revision is necessary due to the rise in costs of energy, packaging, logistics, and most importantly, the procurement cost of raw milk from farmers,” stated R.S. Sodhi, Managing Director of Gujarat Cooperative Milk Marketing Federation (GCMMF), which markets dairy products under the Amul brand. “Over the past year, the procurement cost paid to dairy farmers has increased by nearly 15% due to higher feed and fodder costs.”
Factors Driving the Increase
Several interconnected factors have contributed to the price hike:
The summer heat wave across northern India affected milk production, with yield per animal declining by 10-15% in many regions. This seasonal impact has been more pronounced this year due to unusually high temperatures.
Feed costs have surged significantly, with cattle feed ingredients like maize, soybean meal, and de-oiled rice bran recording price increases between 15-20% over the last six months. This has directly impacted farmers’ production costs.
Transportation and energy expenses have risen with higher fuel prices, adding to operational costs across the supply chain. Packaging material costs, particularly for plastic and paper, have also seen substantial increases.
Labor shortages in some dairy-producing regions have further strained the production ecosystem, requiring higher wages to maintain adequate staffing levels at collection centers and processing facilities.
Impact on Consumers and Inflation
The price increase comes at a challenging time for consumers, as food inflation remains a significant concern. Milk and dairy products constitute approximately 6.6% of the average Indian household’s food expenditure, according to the National Sample Survey Office.
Economists suggest this price hike could contribute an additional 8-10 basis points to food inflation in the coming months. “Dairy products have a significant weightage in the Consumer Price Index. This increase will likely have a cascading effect on prices of other dairy-derived products like curd, paneer, ghee, and sweets,” explained Devendra Kumar Pant, Chief Economist at India Ratings.
The impact will be particularly felt by lower and middle-income households for whom milk is an essential daily purchase and a crucial source of nutrition, especially for children.
Industry Outlook
Dairy industry representatives maintain that despite the increase, milk prices in India remain among the lowest globally, while farmers receive among the highest percentages of the consumer price compared to other countries.
Experts predict that prices may stabilize after the monsoon season as fodder availability improves and temperatures moderate, potentially enhancing milk production. However, structural challenges like increasing production costs and climate variability may continue to exert upward pressure on dairy prices in the long term.
“We’re caught in a difficult position of balancing farmer remuneration with consumer affordability,” noted a senior official from the National Dairy Development Board. “The sector needs technological interventions and policy support to enhance productivity and efficiency to maintain long-term price stability.
