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Dairy Aug, 23 2017

Amul cuts skimmed milk prices by 6-7 per cent on weak domestic demand

This decision has accounted for a decrease of the prices by about Rs 10 per kg making the the current prices of SMPs to be around Rs 220 per kg.

By Franchise India Bureau
Amul cuts skimmed milk prices by 6-7 per cent on weak domestic demand

Gujarat Co-operative Milk Marketing Federation Ltd (GCMMF), which sells its products under the Amul brand has decided to cut the prices of its skimmed milk products (SMPs) by 6-7 per cent across all varieties. This, according to experts, is the result of the sharp decline in demand during the ongoing lean season, coupled with a sharp increase in supply.

This decision has accounted for a decrease of the prices by about Rs 10 per kg making the the current prices of SMPs to be around Rs 220 per kg.

"We have cut maximum retail price (MRP) of skimmed milk powder by six-seven per cent across all varieties recently because of weak demand from consumers. SMP prices are likely to remain subdued in coming months due to the commencement of new milk supply season," said R S Sodhi, managing director, GCMMF.

The price decline, however, is unlikely to impact farmers’ realisations for the supply of liquid milk as dairy companies are preparing to absorb a squeeze in margins from lower prices. "Dairy companies in Maharashtra have posted lower profit margins for June quarter due to increase in milk procurement prices. Milk prices, however, are unlikely to decline because of a cut in SMP prices," said Shirish Upadhyay, senior vice-president (strategic planning), Parag Milk Foods Ltd, the producer of Gowardhan brand milk and cheese.

An Edelweiss Securities report said that the average milk procurement price for Prabhat Dairy stood at Rs 27.1 for the April–June quarter of 2017, up by five per cent from the corresponding quarter last year and down by around five per cent from the previous sequential quarter.

However, dairy producers are having a hard time on the exports as the prices prevailing in the international markets are 20 per cent less than the domestic market.

Related: Mother Dairy aims 20% growth from health segment

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