Dairies increase supply rates as global SMP prices hit record high

AN UNPRECEDENTED rise in world commodity prices has caused dairies across the country to raise their purchase prices. While some dairies have already passed on the increased costs to the consumer, others have decided to correct the commission they pay to their resellers.

The current price hike, however, has not resulted in windfall gains for farmers because the cost of raw materials, especially protein (rice bran meal, de-oiled cottonseed meal, etc.), is is greatly appreciated.

On Tuesday, the Dairy Farmers and Processors Welfare Organization – the umbrella body for private and co-operative dairies in the state – announced a Rs3/litre increase in the purchase price of milk in the state. So dairy farmers in the state would now be paid Rs 33/litre for milk containing 3.5% fat and 8.5% SNF (solid non fat).

This is the highest award received by farmers in the state to date, said Dr Vivek Ksheersagar, Managing Director of the Pune District Milk Farmers Cooperative Union, owner of the Katraj Dairy brand. . “We have seen prices go up to Rs 31-32/litre but that is quite historic,” he added. Global and domestic forces, dairy owners said, pushed the price chart north. On the global front, skimmed milk powder (SMP) prices have reached an all-time high.

On March 15, the bi-monthly SMP auction on Globaldairytrade – the online platform owned by New Zealand cooperative dairy giant Fonterra – reached a five-year high of $4,545/tonne. On the domestic market, SMP trades at Rs 300/kg and white butter at Rs 390/kg. Higher demand for SMP due to the easing of Covid-19 restrictions across the world as well as the Ukraine-Russia war has driven prices up.