Aavin hikes prices of milk products

CHENNAI: Faced with rising prices of sugar, ghee and butter, state run dairy co-operative Aavin has increased the prices of all its products for the first time in two years. The maximum rise in prices has been effected on its sweet products -- the milk khova (pal khova), gulab jamun and mysorepa.

The increase comes on the back of the dairy increasing the procurement price of milk and a subsequent hike in butter and ghee prices. With this increase, the flagship sweet brand of Aavin, the milk khova, will cost Rs 125 for 500 grams, up from Rs 90 earlier. Also, half kg of gulab jamun and mysorepa, which were earlier priced at Rs 85, has also seen the price increased to Rs 125. However, the price hike is just marginal for most of the products, with the increase ranging between just about a rupee or two for fast moving consumer products.

The price increase, especially those of the sweet products, seems to have been triggered by the surge in sugar prices. Since October, sugar prices have been rising steadily by about 19% in all the metros, due to delay in the cane-crushing process in Maharashtra and Uttar Pradesh, two of the top sugar-producing states in the country. Sugar price has been hovering around Rs 35 since mid-November.

Products like lassi, maavin (a mango drink), hot milk, curd and probiotic curd have seen a negligible price rise of one rupee or two. Officials say the prices are still lower than the products of Amul and other private dairies.

The hike was effected as Aavin increased the procurement price of milk by Rs two per litre of cow milk and Rs five per litre for buffalo milk since September 1, 2009.

The last price hike for Aavin products came in July 2007. The increase in the price of all of Aavin's products comes on the back of the co-operative recently increasing the price of its butter and ghee products. Just about a week back, Aavin increased the price of its ghee by Rs 40 per litre, while butter price was increased by Rs 15 per half kg. Aavin procures 25 lakh litres of milk from milk producers in the state and the co-operative had increased the procurement price of milk twice in the last two years. The hike in September was necessitated as milk producers in the state threatened to go on an indefinite strike.