Recently Amul and Mother Dairy have declared a price hike in
their milk price. The main reason behind this hike is the increase in input
costs. The heavy rainfall has resulted in lower production of green fodder. In
addition to that transport, logistics, manpower and energy costs have also gone
up due to rising inflation. Amul and Mother Dairy price hike has been a concern
for most people in India because most consume milk and milk products
daily. Let’s understand the price hike and the factors behind it.
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| Amul and Mother Dairy milk price hike |
Constant Price Hike
Milk prices have increased in India due to price hikes of
milk by leading milk suppliers like Amul and Mother Dairy by RS 2 per litre.
The main reason behind this is the increase in input costs due to inflation. This
is the second time that both the suppliers have increased the milk price in the last 6 months. They had increased the price of milk by Rs. 2 per litre in March
too.
Increase in Input Costs
Amul said in the press release that the overall price rise effect on the MRP is 4 per cent which is still lower than the prevailing food inflation rate. Amul and Mother dairy price hike has been due to an overall increase in the cost of operation and production of milk. Amul’s press release said that the cattle feeding cost has increased by 20% compared to last year. As a result of the increase in input costs, member unions have already increased farmer’s prices in the range of 8%-9% over the previous year.
Lower Yields of Green Fodder
The rainfall in India has been in abundance which shall lead
to the easy availability of green fodder. But the situation is reversed. The
continuous and heavy rainfall has resulted in lower yields of green fodder.
Protein and mineral mixtures have also seen a price rise. This too has increased
the cost of cattle feed.
Low Milk Collection
Due to continuous rainfall in milk-producing states, there
has been an increase in the disease in cattle. Lumpy Skin Disease found in
cattle in Gujarat has been a great concern. This has affected the milk
collection in the state. The supply-demand mismatch has resulted in a price rise.
So we can understand that Amul and Mother dairy price hike
has some genuine reasons. An increase in input costs, low milk collection due to
sick cattle and lower yields of green fodder has led to milk price hike in
India.
