The cost of milk in India has been on the rise. Recently, Mother Dairy– a leading dairy company in India, has increased milk prices by Rs 2/litre in the Delhi-NCR region, citing a rise in input costs, including a significant increase in feed cost, which has gone up to Rs 20/kg from Rs 8/kg a year ago. This increase in milk prices is not limited to Mother Dairy, as milk inflation in India was 8.79% in January 2023, with prices rising since a 3.81% jump in February 2022.

Why Have Milk Prices Hiked?

The reasons for the rising milk prices in India are multiple. One of the primary reasons is the shortage of feed caused by the lockdown and the high cost of cattle feed. The outbreak of lumpy skin disease among cattle has also affected milk production in some areas. In addition to these factors, rising costs of production, transportation, and storage have further added to the cost of milk production.

Measures To Address Milk Crisis

The government can take various measures to address the crisis in the milk industry in India. One of the immediate steps could be allowing duty-free imports of butter oil and SMP to address the shortage of milk. Also, the government may allow NDDB to import SMP and fat at no charge to create a buffer stock for the summer. These measures will help to stabilize the milk supply and control the rising prices of milk and milk products.

Insight

The rise in milk prices in India has a significant impact on the overall economy and the common man’s purchasing power. As per the market experts, not just milk, but other products such as butter, bread, biscuits, microwaves, ACs, refrigerators, and cosmetics are also likely to become more expensive. The overall impact of inflation will be felt in the summer when the demand for milk and milk products is expected to be high due to the seasonal demand.