Mother Dairy announced a Rs 2 per litre increase in its milk prices across India, starting from June 3, 2024. This decision follows Amul’s similar price hike by Rs 2 per litre, which also took effect on Monday.
The price increase is due to rising production costs, which have been going up for over a year. Mother Dairy mentioned that they had tried to keep prices stable despite higher milk procurement costs in recent months. They noted that the farm price increase is now partially passed on to consumers, resulting in a 3-4% rise in the maximum retail price (MRP).
Amul’s managing body, the Gujarat Cooperative Milk Marketing Federation (GCMMF), explained that the Rs 2 per litre hike represents a 3-4% increase in MRP, which is lower than the average food inflation rate.
The Reserve Bank of India (RBI) reported in its annual summary that rising prices in the food and beverages category have significantly driven India’s inflation in FY24. The contribution of food and beverages to overall inflation was 60.3% in FY24, compared to 46% the previous year. The central bank predicts consumer price index (CPI) inflation at 4.5% for FY25.
Both Mother Dairy and Amul last raised their milk prices in February 2023. Mother Dairy also warned that the ongoing heat wave could further impact milk production.
Mother Dairy stated that around 75-80% of its milk sales revenue goes towards procurement to support dairy farming. Similarly, GCMMF said that about 80 paise of every rupee spent by consumers on milk and milk products is passed on to milk producers.
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