Milk shortage: Bulk supply partially hit by private players skewing market

This has resulted in KMF managing to supply milk to its retail customers while bulk customers, particularly the hotel industry, have been affected badly in the last two weeks

Reduced milk production owing to the dairy industry hitting its annual lean season has brought pressure on the Karnataka Milk Federation’s (KMF) milk supply chain, causing a shortage in its bulk supply in Bengaluru currently. Private players purchasing milk from the retail market to sustain their businesses in milk products is said to be causing a disruption.

This has resulted in the KMF managing to supply milk to its retail customers while its bulk customers, particularly the hotel industry, have been affected badly in the last two weeks. The Bruhat Bangalore Hotels’ Association in a note on Wednesday highlighted the shortage.

Milk production has declined due to the non-availability of green fodder and prevailing heat. “Private businesses using dairy products are purchasing Nandini milk, causing strain in the market. We have also instances where private milk dairies have purchased our milk at ₹39 a litre and sold it after repackaging it at over ₹48 per litre. Hence, the six-litre jumbo pack has been discontinued and bulk milk supply has been drastically reduced,” said Bangalore Milk Union Ltd. (Bamul) president Narasimhamurthy.

He also said private dairies were procuring milk directly from farmers in rural areas by offering a higher price, thus reducing the union’s procurement. Bamul, which meets a big part of Bengaluru’s requirement, has been procuring about 12.9 lakh litres as against 14 lakh litres daily in the corresponding period last year.

“A milk producer gets about ₹36 a litre if milk is supplied to the KMF whereas several private dairies from neighbouring States offer close to ₹40 a litre.” In general, many small milk producers have given up on rearing cows as it has become unsustainable, he added. Blaming the KMF for the erratic supply, Kadepalli Nagaraj, a director in the Kolar Milk Union, also acknowledged the role of private dairies procuring milk from farmers, especially in border villages.

The KMF, which in the peak of the flush season last year procured 94 lakh litres a day, is currently procuring 72 lakh to 74 lakh litres daily across the State, approximately 1% less than that in the corresponding period last year. Nationally, milk production has come down by about 8%, KMF sources pointed out.

The federation sells about 42 lakh litres of milk daily while the rest is used for its products such as curd, sweets, ice cream, paneer, and cheese. What has caused concern is a sudden spike in the sale of curd by 22%, an increase that has been termed as abnormal as natural rise in the recent years has been 8% to 10% during summer when customers gulp buttermilk to beat the heat.