Just ahead of flush season when output surges
NEW DELHI, SEPT 9:
Mother Dairy’s move to hike milk prices by four per cent has caught everyone by surprise.
The hike comes at a time when skimmed milk powder (SMP) prices have crashed and the monsoon deficit has shrunk.
More importantly, it is just ahead of the ‘flush’ season when production shoots up.
“It looks they are saddled with huge stocks of skimmed milk powder (SMP), which they are unable to dispose of.
“They seem to have increased liquid milk prices just to cover these losses,” an industry source told Business Line.
Mother Dairy, which sells more than 30 lakh litres of milk in the National Capital Region accounts for more than half of the packaged milk sales.
Sources said that Mother Dairy currently holds SMP stocks of some 40,000 tonnes, valued at about Rs 600 crore at Rs 150 a kg.
However, S. Nagarajan, Managing Director, Mother Dairy, disputed this figure and estimated the company’s SMP stocks at 22,000-24,000 tonnes.
Nagarajan attributed the hike in prices to the rise in logistics, packaging, power and procurement costs.
Mother Dairy procures milk from as far as Andhra Pradesh and Gujarat, besides Uttar Pradesh and Punjab.
Stating that the company has held on to the prices over the past one year, Nagarajan said: “Mother Dairy has caught up with Amul, after almost six months in terms of increasing prices.” Amul had made a price hike in April this year.
“There is no basis for hiking the prices, as prices of both powder and milk have come down compared with a year ago.
“The hike is inflationary and anti-consumer,” said Kuldeep Saluja, Managing Director of Sterling Agro Ltd, a skimmed milk powder supplier to Mother Dairy.
SMP itself is today available at Rs 140-150 a kg against Rs 185-190 a year ago.
Dairies in North paid up to Rs 31 a litre to farmers during the peak season, which has now fallen to Rs 26 in case of full cream milk containing...