Karnataka milk Federation seeking Rs 867 Cr Working capital loan to pay to farmers

Karnataka Federation has 14 district unions and none of them have defaulted in their payments to the farmers. There has been a decline in demand of milk and milk products in last two months. The unions have decreased milk prices twice in the range of Rs 2.5 to Rs 3.5 per liter which involved around 2 million farmers. Milk procured reached to a level of 81 lakh lpd and due to poor demand of milk , almost 30 % of this milk is converted into milk powder and other commodities. Currently the federation has a stock of around 7500 MT of SMP which has seen a steep decline in its price from Rs 330 per kg to Rs 230 per kg. The stocks of butter is above 2000 MT and the prices of butter has also plummeted from Rs 350 per kgs to Rs 225 per kgs now. The federation whose brand Nandini has stood third best brand under Food and beverage category has decided to pledge its stock and get a working capital loan of Rs 867 Crore at a negotiated rates of 5.67%. The unions are incurring losses in conversion of milk into commodities and most part of iyt is getting done a at a third party location in Maharashtra and Tamil Nadu.