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Milk prices slashed down in Chennai after a long time in the absence of sales

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In response to a decline in the sale of milk and dairy products, Hatsun, the producer of Arokya milk and curd, has reduced the price of its full cream milk by 2/litre and curd by 4/kg, effective from Tuesday.
This marks the first price reduction in several years, with the last dip occurring during the pandemic when private milk sales to hotels, tea shops and other commercial establishments collapsed.

Private milk prices slashed as sales see a dip
Other private dairies are expected to follow suit and lower their maximum retail price (MRP) later this week. Another Chennai-based dairy has decided to implement similar pricing changes in areas beyond Kancheepuram and Chennai city limits. During summer holidays, many people travelled outside Chennai, resulting in a decline in private milk and curd sales by 10% to 20%. Additionally, summer rains in May significantly boosted milk production in Tamil Nadu.

Consequently, private milk companies have reduced procurement price by up to 10 per litre without prior notice since the last week of May.

They are now procuring milk at 30/litre to 32/litre, compared to 42 last month.
“But these companies did not pass on this benefit to consumers by reducing the selling price,” said S A Ponnusamy from the Tamil Nadu Milk Dealers’ Welfare Association.

Ponnusamy said private milk companies, which increased the selling price of milk by 4 per litre immediately when the procurement price was increased by just 0.50 paise per litre last year, should correspondingly reduce the selling price now that the procurement price has dropped by 10 per litre.

Domestic consumers, however, argue that full cream milk is primarily used by hotels and tea shops. They believe private companies should consider reducing the MRP of toned milk and standardized milk. M Somasundaram, a consumer rights activist, pointed out that the discussion often focusses solely on prices, neglecting quality.
“The fat content in milk is crucial, and while private companies currently perform better than Aavin, the market dynamics are expected to shift significantly once Amul fully enters Chennai market,” he said.

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