Tamil Nadu Dairy Sector Faces Milk Shortage Amidst Rising Prices
The dairy industry in Tamil Nadu is undergoing significant challenges as private processors announce another retail price increase of Rs 4 per litre for milk and curd, effective from July 9. This marks the second price adjustment in the region this year, driven by reduced local milk procurement and escalating logistics expenses.
The Tamil Nadu Milk Agents and Workers Welfare Association has issued a warning regarding potential supply disruptions across multiple states, which could lead to a severe milk shortage in the region. The primary cause of the shortage is attributed to the failure of the recent summer monsoon, which has drastically reduced milk production not only in Tamil Nadu but also in neighboring states such as Andhra Pradesh, Telangana, Karnataka, Kerala, and Puducherry.
In response to the dwindling supply, private dairy companies have increased farmgate prices and introduced financial incentives to attract dairy farmers. This competitive pricing strategy has impacted the state’s public distribution system, causing many farmers to shift from the state-run Aavin cooperative to private processors. Aavin's daily milk procurement has reportedly fallen to 25 lakh litres and has not recovered since the previous administration, prompting calls for government intervention to stabilize production.
Private processors argue that the price hikes are necessary to mitigate rising upstream supply chain costs. Earlier this year, dairies raised prices by Rs 2 per litre, but recent geopolitical tensions in West Asia have exacerbated the situation, leading to higher international oil prices and increased transportation costs.
Industry leaders, including Arokya Milk, have announced that the revised price structures will apply from July 9. Prices for half-litre packages of toned, standardized, and full cream milk will be Rs 31, Rs 37, and Rs 41 respectively, while one-litre packages will cost Rs 57 for toned, Rs 69 for standardized, and Rs 76 for full cream milk. Additionally, premium curd brands Hatsun and Arokya will see price increases to Rs 44 and Rs 42 for 500 grams, with increased commissions for local retailers to support distribution.
