Liquid milk prices rise again

Higher input costs to blame
Dairy farmers are seen waiting for wholesale buyers at the Arkandi Bazar in Faridpur upazila of Pabna. Despite being ready with large pails of raw milk, they have been unable to secure adequate profits this year due to rising input costs. PHOTO: Ahmed Humayun Kabir Topu

The price of liquid milk has again increased by Tk 10 per litre while half-litre packs will now cost Tk 5 more as leading producers have raised the maximum retail price of their products by 12.5 per cent. 

According to retailers in Dhaka city, liquid milk products of Aarong Dairy, a brand of Brac Enterprises, as well as that of Pran and Akij Group's Farm Fresh have increased to Tk 90 per litre from Tk 80 previously.

Similarly, the price of half-litre packs of those companies has risen to Tk 50 from Tk 45. On the other hand, the state-run Milk Vita has yet to review its prices but retailers warn that it may happen soon.

An official of Aarong Dairy said that higher input costs, including that of animal feed, transportation and packaging, has inflated liquid milk prices in different areas of the capital.

However, consumers say the rising cost of essential commodities coupled with higher milk prices is putting extra pressure on them at a time when most are still recovering from the fallouts of Covid-19.

Nurul Alam Shikdar, a retailer in the Pallabi Extension area of Mirpur, said the new hike in liquid milk prices was effective from August 23.

Earlier in May, the price of liquid milk rose by Tk 10 per litre while half-litre packs saw a Tk 5-7 bump with Aarong Daily being the first to take the initiative.

Mohammad Anisur Rahman, senior director of BRAC Enterprises, yesterday said that due to the increase in fuel prices, the cost of milk procurement, processing and distribution has also increased.

"In this situation, Aarong is being forced to fix a new price," he added.

Rahman went on to say that the prices of related raw materials, such as cartons, has grown by between 20 per cent and 40 per cent.

But in an effort to ease the sufferings of its suppliers, Aarong is paying farmers an extra Tk 3.80 per litre considering the hike in feed prices and other operating costs, he said.

As such, the company is now buying raw milk for about Tk 46 per litre instead of Tk 43 previously.

Kamruzzaman Kamal, marketing director of Pran-RFL Group, said the production cost of milk has risen considerably due to the increase in the price of diesel, feed, labour and more.

"Against this backdrop, it is tough to do business selling milk at the previous rates," Kamal added.

Feed prices went up 10 per cent after the recent diesel price hike while the cost of soybean meal and maize, two key ingredients of dairy feed, rose by 40 per cent to 50 per cent, said Mohammad Shah Emran, general secretary of the Bangladesh Dairy Farmers Association.

Monul Haque Chowdhury, general manager (marketing) of the Bangladesh Milk Producers' Co-operative Union Ltd (Milk Vita), said although they have not increased the price of their liquid milk products, there are plans to do so in the future.

"The next step will be taken by contacting the ministry," he added.


Dairy farmers and traders are yet to benefit from the rise in pasteurised milk prices though as the price of each litre of raw milk with 4 per cent fat was fixed Tk 46 earlier this month from Tk 41 a month ago, which is not enough to cover the increased costs.

"And although milk companies have increased their prices, the Tk 2 incentive they offered for supplying each litre of quality milk has been cut off in the new price list. So, the new prices have not benefitted us," said Raju Ahmed, a dairy farmer of Ramkharua village in Sirajganj's Shahzadpur upazila.

Besides, most dairy farmers and traders say the price of dairy feed has been increasing, leaving farmers worried about being able to continue their business amid the hardship.

"Most marginal farmers borrow money from milk traders to maintain their farms so they are bound to give milk below the market price to them," said Saiful Islam, a leading dairy farmer from Pabna.

Islam added that nobody can supply milk to Milk Vita or any private company without a personal or association code number.


Powdered milk prices were also hiked by Tk 50-60 per kilogramme (kg) in the last few days. As such, powdered milk produced by Dano, a brand of Arla Foods, sold for Tk 780 per kg while that of Diploma, a product of New Zealand Dairy, were going for Tk 790 per kg at retail on Saturday.

According to the Department of Livestock Services, the country's domestic milk production stands at 9.9 million tonnes against a demand of 15 million tonnes. So, the country imports 0.12 to 0.14 million tonnes of powdered milk to help meet the shortfall. 


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