Leading cooperative milk producer Milkfed today ruled out any hike in milk prices, saying it has surplus skimmed milk powder (SMP) to meet the requirement.
"There is no need to raise retail prices of milk this summer as we have enough supply of SMP which can be used for converting into milk and meet the requirement this season," a senior official of Punjab State Cooperative Milk Producers Federation Limited (Milkfed) said here.
Buoyed by the record increase in milk procurement, Milkfed in summer season did not raise procurement and retail price of milk.
"To raise milk procurement, we generally raise milk procurement price for dairy farmers in May or June which is followed by increase in retail rates. But this summer season, we did not touch the rates," he said.
Milkfed, which sells milk under 'Verka' brand, pays Rs 390-410 per kg fat to farmers for milk procurement at present.
Retail milk rates in Punjab have zoomed by 10-15% in last one-and-a-half years while daily milk sales by Milkfed is pegged at 9 lakh litres.
Milk procurement starting from April till June 7 this year has grown by 20% to 13.78 lakh litres per day from 11.49 lakh litres during the corresponding period last season.
Moreover, in the first quarter of 2012, average daily milk procurement rose by 15-20%.
"The main reason in increase in milk procurement was that private milk producers slashed milk procurement rates and as a result of which, small dairy farmers started supplying milk to Milkfed," he said.
Punjab Milkfed at present has 5,800 tonne of SMP in its inventory and out of which 4,500 tonne could be used for reconstitution of milk for the current summer.
Because of oversupply of SMP with several milk federations across the country, the market price of SMP has also come down to Rs 140 per kg fat from Rs 200 per kg fat last year, making unviable and unprofitable for Milkfed to sell in domestic market.
"Our SMP cost is Rs 160 per kg fat while market rate is less than that and moreover there is no demand for the same," he said adding, "We may also look forward to export SMP as and when the Centre gives nod in this regard."
Interestingly, Milkfed buys 1,500 tonne of SMP every year in summer season to boost milk supply. "This year, for the first time, we want to sell SMP but there is no buyer," the senior Milkfed officer said.
Milkfed, the largest milk supplier in Punjab, procures milk from 6,000 milk cooperative societies and 2,000 big dairy farms set up across the state.