The flavours of milk this season seem to be both political and statistical.
Amid Karnataka’s state assembly elections, political parties look at each other after Amul plans to sell milk and curd in the southern states against the local brand Nandini. Meanwhile, milk prices burn larger holes in consumers’ pockets.
Per the April 12 data, inflation for the ‘milk and products’, a sub-group of the Consumer Price Index (CPI), was 9.31% in March. In Q1FY23, ‘milk and products’ inflation averaged 9.25%, the highest since October-December 2014.
While milk is important politically, the ‘milk and products’ sub-group is a considerable constituent of the CPI, accounting for 6.61% of the complete basket. Milk prices influence 8% of CPI inflation. The rising milk inflation is a mixture of rising input costs and falling domestic supply.
The RBI’s latest monetary policy report mentioned that Major milk cooperatives like Amul and Mother Dairy upraised retail prices by Rs 2-3 per litre in two and three spells since September, followed by other state cooperatives, increasing the feedstock costs.
The cost of feeding cattle increased rapidly. Wholesale price data from the commerce ministry displays fodder inflation in double-digit territory since February 2022, a 30.9% high in November. In February, fodder inflation continued to elevate at 24.3%.
