Amarsingh Kadam Patil, another farmer from the village of Sansar in Indapur taluka of Pune district, is equally perplexed about the sudden decision of private dairies to slash the procurement price. “Till April 15, the procurement price was Rs 37-38 per litre. Then there was a correction of Rs 1, and now from Monday, we are told the procurement price will be between Rs 34-35 per litre,” he said.
Kadam Patil maintains a herd of about 50 animals whereby daily milk production is 200 litres. “Since the last week of April, milk production has declined to 150 litres and is going to slide further,” he said. Patil and other farmers from Indapur sell milk mostly to the local Sonai dairy.
Dairies on their part say the current price correction was overdue, and has to do with increase in milk production according to the reports published in indianexpress.com.
Rajiv Mitra, CEO of Lactalis Prabhat, pointed out due to unseasonal rains milk production has increased by around 10 per cent. “The shortfall felt in February and March is now over. Thanks to the rains, milk production has increased and so dairies are now correcting their procurement price,” he said.
For dairies, another reason for this price correction is the drop in prices of Skimmed Milk Powder (SMP) and white butter.
Dasrath Mane, chairman and managing director of Sonai Dairy, said SMP prices have come down from Rs 310-315 per kg to Rs 290-295 per kg, while white butter prices have corrected from Rs 425-430 per kg to Rs 390-395 per kg.
“Earlier in the year, some dairies had created a scare by talking about a deficit in milk production in the days to come. This had not only increased procurement prices but also pushed up prices of SMP and white butter. However, the situation has changed which is reflected in the procurement price correction,” he said. While Mane ruled out further correction in prices, other private players did not do so.
Just a few weeks ago, concerned with what could be a possible shortage of SMP and white butter, the central government was mulling over importing 10,000 tonnes of white butter. However, protests from most dairies prompted the government to shelve the decision. At present, the country has around 1-1.5 lakh tonnes of SMP and around 75,000 tonnes of white butter.
