Dairy products are one of the most essential ones in a household. But a little change is being expected in the coming few days in the prices of dairy products. Economists have predicted an increase in the price of dairy products, especially milk. The reason for the rise predicted is to balance the high procurement rate as the demand is increasing. The Government had also decided to levy GST on dairy products in a meeting earlier this month.
Milk Cost Already Increased By 5.8 Percent
In the meeting of the GST council headed by Nirmala Sitharaman, Minister of Finance and Corporate Affairs of India, it was decided that the products like curd and lassi from dairy products will carry 5 per cent GST. In India, wholesale milk costs have increased by 5.8 percent annually, and economists predict that as demand increases, prices will continue to rise for consumers. Due to an increase in the price of cattle feed, milk procurement prices have also gone up. In the past five months, dairy businesses in India have increased milk selling prices by about 5-8 percent.
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A Rise In Demand
India experienced a rise in milk demand as a result of the country’s widespread heatwave. On a yearly basis, milk prices in south India increased by 3.4 percent. According to analysts at ICICI Securities NSE 2.21 percent, the end of the flush season, rising consumption, and a hot summer are to blame for the increase in wholesale prices. Due to expected revenue growth, dairy businesses stand to gain from the price increases. The increase in procurement prices, as well as the costs of transportation and packing, are expected to have a negative impact on their operating profitability, which is expected to fall to about 5% this fiscal.
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