Explained: Why are milk prices rising?

Milk prices have risen several times in the last year. Till February last year, full cream milk in Delhi-NCR cost Rs 58 per litre, while toned milk cost Rs 48. Come February 2023, and the price of full cream milk has shot up to Rs 66 litre and toned milk costs Rs 54 per litre. So, why are milk prices rising and will they continue to do so in the coming months?
RS SodhiPresident of Indian Dairy Association and ex-MD of Amul India says the rise in milk prices benefits farmers directly. In this week’s episode of TOI Business Bytes, Sodhi talks about the pinch for consumers, and how over the long term the milk prices will rise in line with overall inflation.

“In the last few months, milk prices have risen by 14 to 15% much more than the inflation. But if you look at the last three years, it is less than 7%. 10 years ago full cream milk prices were at Rs 42. There has been a 52% increase. But this is a demand-supply situation because during COVID farmers suffered because of less demand. Last one year, the input prices, that is feed cost increased by 20 to 25%,” Sodhi explains.
Sodhi is of the view that by 2047, India will be producing 620 million metric tonnes of milk, which will be 45% of the world milk production. He highlights the important announcements made by Finance Minister Nirmala Sitharaman for the cooperative sector in her Union Budget 2023 speech. “I think the government has understood the need of the cooperatives and by giving the due emphasis in the budget, I think a lot more will come,” he told TOI.
Sodhi also talks about the future of the Indian dairy sector and the need to invest in White Revolution 2.0. Watch the video above to hear RS Sodhi’s insightful views on milk prices and the road ahead for the Indian dairy sector.