Milk prices to rise in Delhi within a week

Milk will soon get costlier by Re 1 in Delhi market, with country’s largest food brand Amul planning to raise prices of liquid milk within a week.

Sources close to the development in the dairy sector revealed that the Rs 6,711-crore Gujarat Cooperative Milk Marketing Federation (GCMMF) that markets Amul brand of dairy products is considering revision of milk prices for full-cream and toned milk. It is believed that other dairy players too will revise prices once GCMMF announces the raise.

"Dairy players usually follow the market leader in every state, irrespective of their national position. However, it is likely to be an unprecedented move by the dairy major GCMMF (Amul) in Delhi market where Mother Dairy is the market leader," said an industry expert. He added that milk price rise is inevitable in the country on account of delayed monsoon and increasing costs of procurement by the dairies. Cost of milk production has gone up by 15-20% in past few months on account of expensive cattle feed.

Last week, capital’s largest player and National Dairy Development Board subsidiary Mother Dairy increased milk prices in select categories. Mother Dairy sells close to 25 lakh litre milk a day in Delhi market. It revised prices of double toned milk by Re 1 to Rs 19 per litre and toned and bulk vended milk to Rs 20 per litre. Prices of skimmed milk of Mother Dairy too went up by Rs 17 a litre from Rs 16 earlier.

Mother Dairy sells close to 11 lakh litre milk a day through its vending machines. Interestingly, Mother Dairy is garnering Re 1 per litre extra in the categories where it is dominating and Amul is not present. The second largest player Amul could increase price of only double toned milk by Re 1 to Rs 19 a litre. However, the move did not improve GCMMF’s revenues since it sells almost 10 lakh litre of full cream milk a day, a price of which has remained unchanged.

"GCMMF is considering revising full cream milk price to Rs 27 per litre from Rs 26 while the price of tonned milk will also go up by Re 1 per litre in 8-10 days. Mother Dairy that beat GCMMF in last price hike will also now have to consider its pricing," said the source. He added that GCMMF will roll out new price as soon as its inventory of pouches with old price print gets over.

It may be mentioned here that recently milk prices went up in majority of the markets across the country. Markets like Mumbai, Kolkata, Hyderabad, Nagpur and Kanpur saw prices of full-cream milk going up recently. However, Mother Dairy refrained from revising full-cream prices while revising those of other categories. GCMMF’s Banaskantha and Sabarkantha district unions cater to Delhi market.link