Milk prices in India are expected to fall for the first time in about six years. The prices might fall by up to Rs. 1 – Rs. 2 per liter owing to the oversupply due to lucrative prices. Moreover, people in the industry say that milk powder and butter have already become cheaper by 20 percent and a revision is due in the prices of liquid milk.
Samba Shiv Rao, the president at Heritage Foods which is a Hyderabad based dairy said, “Milk prices will drop by Rs 1-2 per litre this month itself”. Rao also supplies premium milk products in other cities like Chennai, Bangalore and Mumbai. He went on to say that market forces have demanded a correction and that if they want to maintain sales and pay the farmers in time, then they do not have any option but to cut prices.
Most of the milk is supplied by the marginal farmers who need to be paid on a daily basis soon after delivery at the collection centers. This year, supplies have increased by 17% in the state of Gujarat and by 20% in the state of Andhra Pradesh.
However, an official in Ahmadabad says that the prices of the retail pouches might not fall.