ICICI Securities: Dairy Firms To Defer  Hikes Due To Lower Milk Procurement Prices
A farmer’s wife milks a buffalo in Bhagpat, Uttar Pradesh, India (Photographer Prashanth Vishwanathan/Bloomberg)

ICICI Securities: Dairy Firms To Defer Hikes Due To Lower Milk Procurement Prices

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

Wholesale milk prices declined 0.2% in August 2020 (first month on month decline after December 2019) due to-

1) lower milk procurement prices, 2) Higher skim milk power (SMP) inventory in India and lower global SMP prices and (3) beginning of flush season.

Milk procurement prices continue to decline with lower demand from hotel restaurant and cafe, Value added products and commencement of flush season.

Dairy companies were supposed to raise prices in H1 FY21 but we expect them to further defer the price hike considering lower procurement prices.

We also believe there is possibility of subsidy announcement by Government to arrest the decline in milk procurement prices.

Click on the attachment to read the full report:

ICICI Securities Milk Prices September 2020.pdf

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