Get ready to pay more for branded coffee,chocolates,ice creams,butter and fresh milk as following Amul's cue of a hike in milk prices,other corporates in the sector are set to once again hike prices of fresh milk. Sources say a decision to this effect will be taken shortly by Mother Dairy,Nestle,Britannia and several other state-based milk brands. According to dairy industry estimates,the prices of milk have consistently increased around 17-19% in the last three years and therefore the current price hike should be looked at in this light. While Amul has citied an increase in input cost as the chief reason for R2/litre price hike for fresh milk,sectoral analysts say that the main reason is a sharp increase in the demand from milk-based food industry. According to one analyst,there has been around 9% increase in milk production in several southern and western states and an increased consumption of skimmed milk powder. The justification given for the hike in milk prices by the big brands is misplaced. The real reason is a sharp increase in demand from the industry itself, the analyst said requesting anonymity. The R1,500-crore branded ice cream market is expected to grow at 15% this year. Around one-third of the countrys 115 million tonne per annum milk production goes to this industry,estimates suggest. However,the government is set to boost the import of skimmed milk powder to offset the current price hike. Already,the dairy-based industries can import 30,000 tonne of skimmed milk powder as was done last year at 5% customs duty. The branded packaged milk and other milk-based products,including ice creams and chocolates have already witnessed 10-15% price hike in March which was first reported by FE. In March,Cadbury India raised the price of its flagship brand Cadbury Dairy Milk (95 gm) from R55 to R60 while Nestle India increased the price of its packaged milk brand Nestle Slim from R45-50. Gujarat Co-operative Milk Marketing Federation (GCMMF) too went for a 10-15% price hike (R15 on 2 litre ice cream pack and R5 on 500 gram butter) of its ice creams and butter brands in March. But amid the hike,it is the 11-million farmers involved with the Indian dairy industry that are suffering the most. It is estimated that for every litre of milk produced in India,the farmer has an expense of about R14 while the price he gets on every litre of milk sold is R1618 which amounts to a margin of R2-4 which is quite less if we consider the labour cost of the farmer himself, an industry report said.
