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Business News/ Companies / Amul not to hike milk prices for next 4-5 months
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Amul not to hike milk prices for next 4-5 months

Milk buying in Gujarat and other parts of India has increased as farmers are being paid better than private dairies

Amul is investing about `50,000 crore to expand its network and set up at least 10 new processing plants across the country in next two years. Photo: Ramesh Pathania/MintPremium
Amul is investing about `50,000 crore to expand its network and set up at least 10 new processing plants across the country in next two years. Photo: Ramesh Pathania/Mint

New Delhi: Dairy products giant Amul India Ltd does not have any plans to raise milk prices for next four to five months but it would review the price situation during the monsoon season, a top official of the company said on Tuesday.

“The last price increase happened in May 2014. At present condition, we have no plan to raise prices in next four to five months because of higher production and procurement," Amul MD R.S. Sodhi said on the sidelines of an event in the city.

The price increase is not required currently as cost of milk production is also under control in view of stable feed prices and lower energy and transportation costs, he said.

However, Amul would take a call on milk price hike during the monsoon season depending upon the feed and other costs. “We will take a call later. If feed prices rise, then we will be forced to hike prices. Otherwise, we will not do for the heck of it. Whenever we did, we raised it by 2 per litre, which is just 4%," Sodhi said. “The average price increase in milk in the current fiscal is around 5-6%, much lower than 10-12% in last two years."

Citing reasons for a rise in milk production and procurement, Sodhi said milk buying from Gujarat and other parts of the country has increased to 19.5 million litres per day from the average 15.5 million litres per day because of better prices being paid to farmers as compared to private dairies.

“What has happened is that with crashing of commodity prices, private dairies are not procuring milk. So, we are getting more milk. We are using this opportunity to increase the market base. So, we are getting the volume growth and this will help us," he said. Barring those farmers selling milk to Amul, other farmers in the country are not getting good prices. “Right now, we are paying 580/kg of fat, which is 12% more," he said. Stating that Gujarat alone cannot meet the growing milk demand, Sodhi said Amul therefore is investing about 50,000 crore to expand its network and set up at least 10 new processing plants across the country in next two years.

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Published: 10 Feb 2015, 05:30 PM IST
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