Dairy Sector Update: Spread Between Milk Procurement Prices, Selling Prices Remains High, Says ICICI Securities
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ICICI Securities Report
Wholesale milk prices have remained flat month-on-month in December 2020. As dairy companies have not raised milk prices post February 2020, wholesale milk prices have remained flat from June-Dec 2020.
Milk procurement prices have continued to remain at lower levels as -
- demand from hotel-restaurant-cafe and value-added products is still lower,
- commencement of flush season and
- lower fodder prices and availability of green fodder.
Dairy companies have not raised prices post Feb-20 and we do not model them to raise prices till Q1 FY22. However, they have also not reduced prices as consumers still prefer branded packaged products.
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