Milk Prices Will Continue To Increase Till Diwali Says An Emkay Report

Milk Prices: At present, the shocks of inflation are continuing unabated for the people of the country. Where daily food and drink items are becoming increasingly expensive, their prices will come down in the future – such chances are also less visible. Now such a report has come about the prices of milk which can further increase your concern.

The big thing told in the report of MK Global Financial Services

A report by MK Global Financial Services said that milk prices have seen a sharp rise in the last six months and will continue to rise due to shortage of milk in the peak demand season. The report said that milk and milk products have seen an average inflation rate of 6.5 per cent on an annual basis in the last 12 months.

Milk prices increased by 8.1 percent in last five months

If we look at the last five months, it increases to 8.1 per cent. Compared to the previous year, the monthly pace has been 0.8 percent. More than double the pre-pandemic five-year average of 0.3 per cent, while its contribution to overall headline inflation has ticked up to 6 per cent post-pandemic. Additionally, India’s exports of dairy products have also increased significantly in the last three years, adding to the domestic shortfall. Dairy exports doubled from FY21 to FY22, mainly due to a rise in international prices, and are on pace to grow further in FY23.

Why milk prices are rising

The ongoing rise in milk prices is attributed to a number of factors, including rising input costs, disruptions due to the pandemic and international prices. According to the report, one of the biggest factors has been the sharp increase in animal feed prices. Fodder prices have been rising at double digits since February 2022, and in fact since May the year-on-year price change has not come below 20 per cent. Cattle feed prices have eased somewhat in the past three months, but have averaged more than 6% from last year

Kovidkal also showed its effect

The most important factor has been the decline in production after Covid. Due to reduced demand from restaurants, hotels, sweet shops, weddings, etc., during the pandemic, prices fell, due to which dairies cut down on purchasing milk from farmers. During this, the prices of skim milk powder (SMP), butter and ghee also fell. The report said that farmers had to reduce the size of their animals to control costs, and also started giving them less food.

milk yield fell

According to the report, the malnourished children of the Kovid era are today’s milk producing cows. Milk yields have fallen, and dairies are reporting low milk purchases throughout the year. It should also be noted that Indian cattle give less milk as compared to the global average.

The process of high production continues till March-April, but this time the situation is different

September onwards is the ‘flush’ season, when animals generally produce more milk with better forage availability and lower temperatures. It peaks in winter and continues till March-April. Dairies also use the extra milk produced at this time to produce SMP and fat, which is used for reconstitution during the summer months for increased demand for yogurt, ice cream, etc.

Milk prices will increase till Diwali

Therefore, the current scenario may continue in the summer months as there is a shortage of milk, especially fat, at a time when dairies would be building up stocks. It has been said in the report that the price of milk will continue to increase till Diwali.

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