Over the last two years, retail milk prices in India have been steadily rising. Back in 2009, milk was still averaging around 16 rupees a litre. But since then, it has seen almost a doubling with milk now being priced at around 30 rupees a litre.
According to an official at Amul, the brand name for Gujarat Cooperative Milk Marketing Federation Ltd. and India's largest manufacturer of milk, prices of milk and milk-based products are set to rise significantly over the next one year.
“We just raised the price of our retail milk by 2 rupees and might see another rise within a year,” said the official, who declined to be identified in the media.
According to local media reports in business dailies, other dairy majors like Mother Dairy have indicated that they too will raise their prices. Some have been raising prices gradually over the last couple of years.
One of the major reasons behind this price rise, according to the Amul official, has been the deficient monsoon that will result in higher commodity prices for raw materials and thus drive up production costs.
There are also other reasons such as fodder scarcity and the damaging, but continuing practice of exporting cattle fodder in India, he said.
“Once milk prices go up, the price for milk-based products like sweets, chocolates, butter, and cheese will also go up. The prices will be further impacted by the upcoming festival season which sees a spike in the demand and consumption of milk-based products especially sweets he said.
Milk production in India stood at 112 million tonnes in 2010 and is expected to reach 166 million tonnes by 2011, Indian government predictions have said.