BackOne in three Indian households affected by high milk prices
In August, India’s biggest diary cooperative GCMMF, which sells products under the brand Amul, said given the rise in input costs, its member unions have increased farmers’ prices by 8-9% YoY. Mother Dairy said farm prices of raw milk have risen 10-11% in a 5-month period
PremiumNEW DELHI: Affected by high milk prices one in every three Indian households has reduced the quantity of milk purchased or switched to low-cost alternatives, LocalCircles said as part of a survey.
Last month several milk brands, including Amul, raised prices of milk by ₹2 per litre citing rising input cost. This came when households were already struggling with high inflation.
“For Indian consumers already struggling in a high food inflation scenario, which seemed to be improving according to the last government data, an increase in milk prices by ₹2 per litre from August 17th by most milk cooperatives is bad news. This is more so since leading milk and milk products brands like Amul had earlier in March this year raised the prices by ₹2 per litre," LocalCircles said as part of its survey findings.
LocalCircles conducted a national survey to understand how households were coping with rising milk prices. The survey received over 21,000 responses from households across 311 districts in the country.
Last month, India’s biggest diary cooperative Gujarat Cooperative Milk Marketing Federation (GCMMF), which sells products under the brand Amul, said that given the rise in input costs, its member unions from where it procures milk, have increased farmers’ prices by 8-9% year-on-year. Mother Dairy said farm prices of raw milk have moved up 10-11% in a five-month period.
Meanwhile, 68% of consumers surveyed by LocalCircles said they paid more to buy the same quantity and brand of milk, while 6% of 10,685 respondents said they have switched to a cheaper brand or a local supplier. Another 4% switched to cheaper alternatives of the same brand they were consuming earlier.
Though no respondent admitted to discontinuing buying milk, 20% respondents admitted to reducing the quantity of milk purchased.
The survey also found that 72% of 10,522 respondents purchased milk packaged in plastic pouches of 500 ml or 1 litre, 12% were buying bottled milk from local farms or bottling units while 14% bought unpackaged milk from local vendors. Only 2% were buying tetra pack milk.
“Despite the higher prices, 68% of the household consumers are continuing to buy their current type of milk but 32% have either reduced the quantity of milk they buy or switched to cheaper alternatives be it the same brand, different brand or local sources. Given the continuing dependence of most vegetarian households on milk and milk products for protein intake, the reduction in quantities of milk purchased is a cause of concern, especially where children might be getting deprived," LocalCircles said.
The situation is a tough one for policy makers and the need of the hour may be to drive efficiencies and reduce wastage so prices can be contained, it said.
Farmers are also approaching the flush season of milk production that sees higher yield, which will likely help check price hikes.
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