Milk prices in India, already raised by 2-3 per cent in May by major dairy companies, could see another increase of 3-4 per cent by July or August if El Niño conditions and a deficient monsoon worsen fodder shortages and impact milk production, according to dairy industry executives as reported by Business Today.
Price Outlook
Industry players stated that poor rainfall often leads to shortages of fodder and water, forcing farmers to reduce cattle numbers. This, in turn, lowers milk output and pushes up prices. Devendra Shah, chairman of Parag Milk Foods, warned that a further increase may be on the cards if rainfall remains below normal in key milk-producing regions. “Milk prices have already increased by around 2-3% and, if rainfall remains below normal in key milk-producing regions, a further 3-4% increase is possible by July,” Shah said, as quoted by ET.
| Company | Price Change in May | Possible Further Increase by July |
|---|---|---|
| Amul | +Rs 2/litre (~2.5-3.5%) | Awaiting monsoon assessment |
| Mother Dairy | +Rs 2/litre | Preparing mitigation measures |
| Parag Milk Foods | 2-3% | 3-4% possible |
Fodder Concerns Loom
The Maharashtra government has urged farmers to increase fodder production amid concerns over a possible shortage. Animal husbandry commissioner Kiran Patil said, “The possibility of a fodder shortage in the near future cannot be ruled out due to El Niño.” He added, “To ensure this situation does not affect livestock and milk production, all livestock farmers in the state should remain alert from now on and plan for fodder crops.” Several dairy companies have also begun working with cattle owners on fodder planning to mitigate any adverse impact.
Major Dairies Monitoring Situation
Amul said it would wait to assess the progress of the monsoon before taking a view on any further price revision. Jayen Mehta, managing director of the Gujarat Cooperative Milk Marketing Federation (GCMMF), said that there is currently no immediate impact on milk availability. “There is no immediate impact of El Niño on the availability of milk,” Mehta said, adding that deficient rainfall generally affects only certain regions rather than the entire country.
Mother Dairy said it is closely tracking conditions across its procurement network. Managing director Jayatheertha Chary noted the company is preparing mitigation measures wherever required.
Supply and Demand Dynamics
The warning comes just weeks after Amul and Mother Dairy increased milk prices by Rs 2 per litre in May. Both companies cited rising procurement costs, higher cattle feed expenses, packaging costs and fuel prices as key reasons behind the hike. Amul said the increase amounted to about 2.5-3.5 per cent per litre, while Mother Dairy noted that procurement prices paid to farmers had risen by around 6 per cent over the past year.
Additionally, Tamil Nadu’s state-run dairy brand Aavin has reportedly reduced supplies due to heatwave-related impacts on production, further tightening availability.
For commodity traders and procurement teams tracking Indian dairy markets, the key data points to watch are monsoon rainfall patterns in major milk-producing states and fodder availability reports from the Maharashtra government. Any sustained weakness in the monsoon could trigger the predicted price hike, affecting procurement costs for downstream processors and consumers alike.
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