Milk prices are likely to go up in 2019, cooperative dairies said, as supplies are less than usual during this period.
Lower returns to farmers have led to the drop in milk production in winter, when supplies tend to go up, they said.
“Milk prices are bound to increase in 2019. Low stocks of skimmed milk powder (SMP) and a drop in milk supplies compared to previous year are the two major reasons,” said RS Sodhi, managing director of Gujarat Cooperative Milk Marketing Federation, which owns the Amul brand.
Dairies except a few cooperatives are not able to give farmers good prices, he said, adding that there was therefore a reduction in buying of cattle by farmers. “Compared to 15 per cent growth in milk supplies during winter, this year we have seen only a 2 per cent increase with daily milk procurement of 248 lakh litres by Amul,” he added.
In 2017, the dairy cooperative, along with others, had raised milk and milk product prices by Rs 2 a litre. Availability of SMP and stable commodity prices have helped keep prices stable in 2018. Stocks of skimmed milk powder in the country as of end-December are 70,000 tonnes, according to the industry estimates.
SMP price has increased 15 per cent in the past one month to Rs 205 a kg, owing to a pickup in exports.