From an average sales of 1.2 crore litres per day, of which 95 lakh litres is sold in milk pouches in Maharashtra, the sale of milk has now dropped down to 50 lakh litres a day. Dairies in the state are being forced to convert the rest to anhydrous skimmed milk powder (SMP).
Lockdowns across Maharashtra due to the second wave of Covid-19 has impacted demand for milk and milk products. Sales are estimated to have suffered by at least 40-60 per cent. 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.
Dairies which were still recovering from the first Covid wave have been hit badly by the second wave. Daily sales have dropped by over 20-25 per cent while sale of milk by-products has dropped by 50 per cent.
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. Ice-cream makers, beverage makers are also not buying in large quantities.
Further, while procurement prices have dropped, the dairies in Maharashtra have decided 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.
Currently, the 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 milk industry is asking the government to intervene and help dairies with export incentives to bring stability to the market. SMP prices are hovering between Rs 170 to Rs 200 per kg while the prices were around Rs 250-260 per kg after the market recovered post the first Covid lockdown.