Milk prices likely to come down : Heritage Foods CEO

After experiencing an upward trend for six consecutive years, milk prices could potentially decline by as much as 5% or Rs 1-2 per litre due to an oversupply in the market. This oversupply is a result of the high prices that have been offered for milk, causing a glut. Industry experts in the cooperative dairy sector have pointed out that while milk powder and butter prices have already fallen by 20%, the prices of liquid milk are also due for a correction. Samba Shiva Rao, the president of Heritage Foods, a dairy-based in Hyderabad, has confirmed that milk prices will decrease by Rs 1-2 per litre in the current month. Rao's company supplies high-quality milk products to major cities like Mumbai, Chennai, and Bangalore. He asserts that a reduction in the cost of liquid milk is unavoidable due to market forces necessitating a correction. Rao states that to maintain sales and ensure timely payments to farmers, a price reduction is necessary.

The milk supply chain is predominantly made up of small-scale farmers who require daily payment upon delivering their milk to collection centres. In the current year, there has been a significant increase in milk supplies, with a 17% rise in Gujarat and a 20% increase in Andhra Pradesh. As a result of the surplus milk, cooperative dairy organizations in Andhra Pradesh have already requested permission from the state government to decrease milk prices.