Association announces increase in milk prices by Rs6 despite lower fuel prices

Milk which was being supplied at Rs85 per litre before the increase, will now cost Rs90 per litre

KARACHI: Decline in petrol prices is not going to benefit the citizens, as one of the major milk cartels of the city, Dairy Farm Association Karachi, announced on Tuesday to increase milk prices by Rs6.

Dairy Farm Association, Karachi, president Muhammad Akhtar Gujjar told The Express Tribune that they have been negotiating with the government to increase milk prices since September, last year.



Karachi Dairy and Cattle Farmers Association chairperson, Shakir Umer said that the association has yet to meet the incumbent commissioner, Asif Haider Shah, to fix the new price for milk.

Prior the increase, the milk was being supplied at Rs85 per litre, whereas the actual rate prescribed by the government is Rs70 per litre. After the increase, milk will cost Rs90 per litre.

Cost of production

According to Gujjar, former commissioner Shoaib Ahmed Siddiqui had formed three committees, under three deputy commissioners, to determine the cost of production of milk. The three committees formed for the purpose, also included members from Institute of Business Administration and Institute of Cost and Management Accountants of Pakistan.

All the committees had submitted their reports according to which the cost of the production of the milk is around Rs83, claimed Umer. With their profit the retail price would have been pegged at around Rs 87, he added.



On the decline in petrol price, Umer said that milk prices were not in any way linked with that of petrol prices.



However, Gujjar claimed that the fodder that their cows eat costs Rs300, however, due to summers the price has increased Rs470. “The price of any edible product has not declined due to decline in petrol prices,” he added.

Ground realities

One of the milk retailers in Akhtar said that despite increase in milk’s price by Rs6 they have been selling at old rates of Rs 85. We had a settlement with the government that we will sell the milk at Rs85 per litre and not Rs90, he claimed. However, due to change in temperature the cost of production is likely to increase, he added.

He explained that if they sold milk at new rates of Rs90 per liter, the government would impose a fine on them and put them behind bars. “If government fails to take any notice within a day or two, we will be forced to increase milk prices to Rs90 per liter,” he said adding that they couldn’t bear loss any long.



Meanwhile, a resident of Ayesha Manzil Hira Adil said that milk in her area was being sold at Rs90 per liter. She said that decline in fuel prices never provides relief to the consumers.

Fixing milk prices is the prime responsibility of the city commissioner, who also works as controller for prices of essential commodities. However, commissioner Asif Hyder Shah was unavailble for comments despite several attempts. His spokesperson said that Shah has taken notice of this issue. “A meeting will soon be held with daily mill owners’ association to resolve the issue,” he said.

Published in The Express Tribune, March 3^rd, 2016.