Milk prices are likely to stay at elevated levels till Diwali in October this year due to rising cost of cattle feed, raw materials, and supply chain challenges, Mother Dairy's top boss said.

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“There is no respite from high milk prices till Diwali this year because of a sharp spike in the feed and raw material cost,” Manish Bandlish, MD, Mother Dairy Fruit and Vegetables, a wholly owned subsidiary of National Dairy Development Board (NDDB), told the Financial Express.

Organised dairy players in Delhi-NCR, including Mother Dairy and Amul, have hiked milk prices multiple times since last year. The price hikes were induced by higher fodder costs, robust demand and some impact due to reports of lumpy skin.

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As per industry estimates, out of the estimated 9 million litres of milk which is supplied daily by the organised dairy players in Delhi-NCR, the two companies, Mother Dairy and Amul have a share of around 40 percent each.

Last month, Amul (Gujarat Dairy Co-Operative) announced a hike of up to Rs 3/litre on fresh milk across the country.

This was followed by Mother Dairy which hiked milk prices in the Delhi-NCR region by Rs 2/ litre. This was the fifth round of increases by the firm since last year.

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Both companies cited an increase in the overall cost of operation and production of milk and the hike in the price of cattle feed.

Fodder and feed costs have increased by 25 percent in the last year and there was some drop in milk production in a few regions because of the spread of lumpy skin disease among the livestock population, Meenesh C Shah, chairman of NDDB, had earlier stated.

As per the report, feed cost has a share of more than 65 percent in the cost of milk production. The cost of feed to cooperatives and dairies has increased to Rs 20/kg from Rs 8/kg a year ago.

“We have been witnessing a significant increase in demand for milk and milk products from both consumers and institutions, even after festivals. On the other hand, procurement of raw milk has not picked up after Diwali as was anticipated,” a Mother Dairy statement said.

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Milk inflation in January stood at 8.79 percent and prices have been rising since a 3.81 percent jump in February last year.

As per the all-India Wholesale Price Index, the annual rate of fodder inflation increased to 29.30 percent in January from 28.66 percent in December 2022.

(Edited by : Sudarsanan Mani)