Milk price hike by Tk 10 per liter across brands leaves big impact on consumers

The first ripple came last November when BRAC Enterprises' brand Aarong Dairy abruptly raised the price of its packaged liquid milk-marking Tk 10 surge per litre and Tk 5 on half-litre packs, setting the tone for a wave of hikes across the market.

Other brands, including PRAN, quickly followed suit, similarly adjusting their prices upwards. Most recently, on Mar 21, the state-run Milk Producer's Co-Operative Union Limited, Milk Vita, also hiked its prices.

A market visit shows Arong's standardised (partially processed) milk now sells at Tk 55 for half a litre and Tk 100 per litre while its pasteurized (fully processed) variant is tagged at Tk 60 and Tk 105 respectively.

The 250g pack has also climbed from Tk 25 to Tk 30. Comparable price jumps are visible across competing brands.

Milk Vita's half-litre pack has gone from Tk 50 to Tk 55, and its one-litre product from Tk 90 to Tk 100-bringing it in line with Arong's current rates.

As milk remains a nutritional staple across all age groups, the sustained price rise has prompted many consumers to scale back purchases.

Retailers, too, report a noticeable dip in daily sales.

The selling companies, however, insist that the price adjustments have been made "reasonably". In 2018, the price of one litre of pasteurised liquid milk ranged from Tk 60 to Tk 65. In 2021, the price was between Tk 70 and Tk 75.

Before the latest price hike, the cost of one litre of milk stood at Tk 90.Thus, within less than a year, the price has climbed by Tk 10 per litre.

Milk Vita claims it was forced to raise prices with ministry approval after incurring heavy monthly losses, according to its Managing Director Zahidul Islam.

Speaking to bdnews24.com, he said: "We last adjusted the price of milk and dairy products in 2022.

"We purchase directly from farmers, and in the past two years, we have increased procurement rates four times-by a total of Tk 13 per litre."

When asked what farmers currently receive, Zahidul said: "The rate depends on fat percentage, ranging from 3 to 7 percent.

"If the milk contains 4 percent fat on average, we pay Tk 58 per litre. For cooperatives that bring milk from distant areas, we cover transportation, which adds over Tk 3 per litre.

"So, with transport, the cost per litre exceeds Tk 61. When factory processing is added, the cost climbs to over Tk 82. Yet we are supplying to distributors at Tk 78."

He added that ahead of Ramadan, Milk Vita submitted a price adjustment request to the ministry, citing examples from private companies.

"Initially, the ministry refused, and we were losing Tk 20-25 million every month. Once approval was granted, we raised prices."

PRAN's Marketing Director Kamruzzaman Kamal said rising production costs at the farm level left no alternative but to increase consumer prices.

"Farmers were struggling due to higher feed costs, and they demanded better prices. To meet those demands, we had to revise retail rates as well," he added.

Attempts to reach BRAC Enterprises' Senior Director Anisur Rahman were unsuccessful.

According to the Department of Livestock Services, there are currently around 2 million dairy farmers in Bangladesh.

In the fiscal year 2012-13, the country produced about 5.07 million metric tonnes of milk. Over the next three fiscal years, production increased to over 7.2 million metric tonnes. By FY 2016-17, production rose to 9.2 million metric tonnes.

FY 2021-22, milk production reached 13.07 million metric tonnes, and in 2022-23, it grew to nearly 14 million metric tonnes. By 2024, production has further increased to 15.25 million tonnes.

In contrast, the annual demand for liquid milk in the country exceeds 15.66 million In metric tonnes. The shortfall is met through the import of powdered milk.

Several companies process around 800,000 to 900,000 tonnes of milk annually to produce different dairy products. The remaining milk is sold by farmers to sweet shops and in open markets.

At Mohakhali's Saattola market, a vendor Md Zahid was selling bottled milk. When asked about prices, he said: "I buy milk from a farmer in Aftabnagar area and sell it here.

Depending on market conditions, the price ranges between Tk 70 and Tk 80 per litre." Speaking about prices, Al Mahmud, the proprietor of Atik Dairy Farm in Sirajganj's Shahjadpur said: "We supply milk to Milk Vita.

"My farm produces between 200 and 350 litres of milk daily. We usually sell it for between Tk 58 and Tk 61 per litre, although the market price sometimes falls."

He, however, could not specify the reasons behind the occasional market downturn.