Lockdown-like restrictions across Maharashtra due to the second wave of Covid-19 has impacted demand for milk and milk products hitting sales by at least 40-60%. With supply exceeding demand, dairies have reduced their procurement prices by Rs 4-5 per litre in the last fortnight. As a result, farmers are now being paid Rs 26-27 per litre instead of Rs 30-32 per litre.
From an average per day sales of 1.2 crore litres of which 95 lakh litres is sold in milk pouches, the sale of milk has now dropped down to 50 lakh litres with dairies being forced to convert the rest to anhydrous skimmed milk powder (SMP).
Dr Vivek Ksheersagar, MD, Pune District Cooperative Milk Producers Union — which retails milk and dairy products under the brand Katraj — said that dairies that were still recovering from the first Covid wave have been hit badly by the second wave. “Our daily sales have dropped by around 20-25% and sale of by-products has dropped by 50%. The dairy has reduced procurement prices for farmers to Rs 26 per litre from Rs 29 per litre,” he said.
“The is a marked lack of enthusiasm among people in celebrating festivals. The drop in demand is due to the restrictions since restaurants and grocery stores are open for a certain number of hours. Moreover, social functions are not permitted and malls, cinema halls have been shut, he said. The sale of butter, paneer, lassi, buttermilk and ice-creams has been hit to the tune of at least 20%, according to industry people. If the lockdown continues, the dairy may be forced to reduce prices further,” said Ksheersagar.
Prakash Kutwal, secretary, Maharashtra Milk Producers and Processors Welfare Association stated that while procurement prices have dropped, all the dairies have taken a decision not to reduce the procurement price below Rs 25 per litre for farmers. Last year in March, milk prices had dropped down to Rs 17-18 per litre but the prices improved to Rs 31-32 per litre after the restrictions were eased and cases had dropped down
Dashrath Mane, chairman and managing director of the Indapur-based Sonai Dairy pointed out that daily sales of some dairies have been hit to the tune of 40-60% since offices, restaurants and small tea shacks have shut down due to the lockdown. “Pouch milk sales have been hit because of the closure of hotels, fewer travellers in railway stations and state transport depots causing a drop in tea sales. The institutional sales of dahi and buttermilk have been hit since the workplaces have shut down again,” he said.
Ice-cream makers, beverage makers are also not buying in large quantities, he said. Sonai Dairy has reduced procurement prices for farmers from Rs 32 per litre to Rs 25 per litre.
According to Mane, the present accumulated SMP stock in Maharashtra would be around 35,000 tonnes and 15,000 tonnes of butter, while nationally the SMP stock would be around 1.5 lakh tonnes. The government needs to intervene help dairies with export incentives to bring stability to the market, he said. SMP prices are currently between Rs 170 to Rs 200 per kg and were around 250-260 per kg after the market recovered post the first Covid lockdown.