Gujarat dairies facing problem of oversupply of milk, lesser demand of milk products, overstock of milk powder

Surat: Due to 18% increase in arrival of milk from milk producers, the dairies in Gujarat are witnessing addition of daily 2.55 crore litre milk per day.

Even after converting the major proportion of milk into other byproducts such as butter, buttermilk, ghee, paneer and cheese, huge stock still lies with dairies unused. As a remedy, at present the dairies are converting lot of milk to powder. However that too has crossed limit now as various cooperative dairies are now having 1.10 lakh metric tonne milk powder in stock. The dairies are now facing cash liquidity and working capital issue.

Last year, the daily arrival of milk in Gujarat was 1.77 crore litre which has been up at 2.55 crore litre per day at present. While supply side has grown up, the demand side has not increased in proportion.

The value of milk powder in international market is Rs 140-150 per kg against which the in local dairies it comes to Rs 140-160. After the payment of Rs 630-640 to milk producers the costing comes to Rs 240 while selling price is Rs 150.

Last year the State had 70,000 mt milk powder in stock while this year it is up at 1.10 lakh mt.

Private dairies have cut the kg/fat rate to Rs 520 against which 18 milk cooperatives that are associated with milk marketing federation have not cut the payment to milk producers. Though supply side has become stronger and demand side needs expansion, the dairies have not announced price cut yet.


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