Karnataka Milk Federation Hikes Ghee Price by Rs 90/Litre

Karnataka Milk Federation (KMF) has announced a price hike of ₹ 90 per litre for its ghee product, raising the retail price to ₹ 700 per litre in key markets. The increase is attributed to rising input costs — particularly for milk solids and packaging — and will take effect from the coming week as part of the federation’s review of margins and procurement sustainability.

This move signals a broader market shift in dairy fat pricing, especially in regions where ghee remains a culturally critical product. For consumers, it means higher essential expenditure; for dairy processors and cooperatives, it reflects the tight link between raw-milk price inflation, processing costs and end-product pricing.

In Karnataka, the Karnataka Milk Federation (KMF) has raised the retail price of its flagship ghee brand by ₹ 90 per litre, lifting the pack price to ₹ 700. This hike comes amid rising input costs for milk solids, packaging and logistics, and signals mounting cost-pressure along the dairy fat value chain.

Across the border in Rajasthan, the RCDF raised its ghee retail price by ₹ 30 per litre (for example, the 1-litre pack of Saras ghee moved from ₹ 568 to ₹ 598) on 27/10/2025. However, within a day media reports indicated the order for the hike had been withdrawn, raising questions about timing and sensitivity of consumer-fat pricing in the state.

Together these dual moves reflect how dairy cooperatives are navigating the tight space between rising costs, farmer incomes and consumer affordability. The Karnataka hike illustrates one end of the spectrum—operator pass-through of cost pressure into retail—while the Rajasthan rollback points to significant political and market resistance to fat-price increases. For the dairy sector at large, this indicates that while fat-product margins are under pressure, end-consumer tolerance for sharp price hikes is increasingly limited—meaning processors may face squeezed margins or delayed full pass-through to milk procurement.

Industry Insight:

The ₹ 90 increase (~15%) in a flagship product like ghee underscores the pressure on dairy value chains from rising feed, solid-milk and packaging costs. Processors may need to revisit product mix, cost-management strategies and premiumisation pathways. For the broader dairy ecosystem — equipment suppliers, feed producers, packaging firms — this pricing move may signal upcoming demand for higher margin, value-added fat-based lines and upgraded production/packaging systems.

Source : DAirynews7x7 Nov 5th 2025