Dakshina Kannada Milk Union reduces procurement price by ₹1/litre
With the sales of milk and other related products falling by 25 per cent in the last three months due to Covid-19 and the subsequent lockdown in the country, the Dakshina Kannada Cooperative Milk Producers’ Union Ltd has decided to reduce the procurement price from farmers by ₹1 a litre. Following this, the farmers will…
At a glance:
With the sales of milk and other related products falling by 25 per cent in the last three months due to Covid-19 and the subsequent lockdown in the country, the Dakshina Kannada Cooperative Milk Producers’ Union Ltd has decided to reduce the procurement price from farmers by ₹1 a litre.
Following this, the farmers will get ₹28.67 a litre for the milk they sell to the Milk Producers’ Union with effect from June 21.
Raviraj Hegde, President of Dakshina Kannada Cooperative Milk Producers’ Union Ltd, said that the other milk producers’ unions under the Karnataka Milk Federation (KMF) have reduced the procurement price between ₹2.20 a litre and ₹4.70 a litre.
The Milk Producers’ Union, which has jurisdiction over Dakshina Kannada and Udupi districts, has been procuring more than 5 lakh litres of milk a day from its members. But the demand for the milk and milk-based products has come down by 25 per cent leading to a reduction in the turnover of around ₹30 crore in the last three months.
The Milk Producers’ Union may witness a reduction of around ₹120 crore in its total turnover during the current financial year, if the situation continues like this. This may lead to a loss of around ₹20 crore to the Milk Producers’ Union during the year.
He said that the most of the hotels and canteens are not working to their full capacity. Educational institutions are not working due to lockdown. Apart from this, religious programmes and other social gatherings have come down drastically. All these factors have contributed to the decline in the milk consumption in these districts.
Milk powder glut
He said around 1.22 lakh litres of milk a day is being converted as skimmed milk powder. This incurs a cost of around ₹11.35 for every kg of powder produced. The price of skimmed milk powder was ₹340 a kg in the market in March. This has come down by ₹160 a kg due to the piling up of the milk powder in the country. The Dakshina Kannada Cooperative Milk Producers’ Union is estimated to have a stock of around 15000 tonnes of milk powder by September.
He said the godowns of KMF are full with the stocks of the milk powder, and the Milk Producers’ Union will have to rely on private godowns to store milk powder. This will add to the cost of the union. The closure of educational institutions is affecting the sales of milk powder.
Stating that the price of the butter has also come down in the market, he said Dakshina Kannada Cooperative Milk Producers’ Union is likely to have a stock of around 950 tonnes of butter by September.
The continued piling up of milk powder and butter will lead to the scarcity of working capital for the union.
Considering all these facts, Dakshina Kannada Cooperative Milk Producers’ Union Ltd decided to bring down the procurement price by ₹1 a litre with effect from June 21, he said.
Referring to the situation in Karnataka, Hegde said KMF collects around 86.73 lakh litres of milk every day. Of this, 39.54 lakh litres is being consumed in the market, and the remaining stock is being used for the preparation of skimmed milk powder.
There is a decline of around 25 per cent in the sales of milk and other related products at the state-level also, he added.
A letter from the Editor
The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.
Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.
In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.
We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.
But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.
I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.
A little help from you can make a huge difference to the cause of quality journalism!