KARACHI: Milk prices in the city declined by 30 percent pushed by 50 percent downturn in demand on the back of lockdown, stakeholders said.
Though official rate of milk remained unchanged at Rs110/litre, several shops were selling the commodity at Rs70 to Rs80/litre in different localities of city. They had also placed new price banners at their shops.
Stakeholders said that due to closure of hotels, restaurants and ice cream parlours, a huge decline was noticed in the demand. Besides, people stocked dry milk at their homes during the lockdown.
Due to a sharp decline in the prices and demand, retailers have changed the mode of milk purchase from fixed rate to open auction. However, the decision has not been accepted by dairy farmers.
United Milk Retailer Welfare Association (UMRWA) Vice Chairman Saleem Gujjar told The News that they changed the mode of payment from fixed amount to open auction, as there was huge decline in demand.
In the fixed rate market agreed by farmers, wholesalers and retailers, farmers used to sell milk at Rs3,510/maund, wholesaler sold at Rs3,800 to Rs4,000/maund while retailer sold at Rs4,400/maund or Rs110/litre.
The whole supply chain was incurring losses and majority of them would go bankrupt during the lockdown. Market timings have also affected the demand of milk, Gujjar said.
Total milk production in Karachi is around 4.5 million litres daily against demand of 5.0 million litres. The remaining 0.5 million litre demand is fulfilled by dry milk.
Though currently demand was almost 50 percent low, the association’s vice chairman said, once market re-opens price of a litre would reach up to Rs200/litre, as new milking animals were not coming in the mandi.
Dairy Farmers Association Chairman Shakir Umar Gujjar said only five percent milk was sold on open auction in the city, while 95 percent was sold on fixed rate. A similar system worked in Hyderabad as well.
“Due to the current lockdown, whole supply chain including farmer, wholesaler and retailer were panicking as the situation is not clear for anyone.”
Currently, production has decreased around 20 percent to 3.5 million litres from 4.5 million litres, which would go up to 40 percent by the time lockdown was over. The production was down, as new milking animals were not coming in Karachi and Hyderabad, he added.
Gujjar said that retailers had decided to take milk over open auctioning, which was not supported by farmers and wholesalers, as it was against the decision of the Karachi Commissioner.
He said that milk was not being sold in mandi, so they were selling at Rs1,500 to Rs2,000/maund. Some shopkeepers were buying at this rate, and were selling at Rs70 to Rs80/litre, but it was adulterated milk with water.
Gujjar claimed that the cost of milk has reached more than Rs110/litre for dairy farmers, as there was a shortage of milking animals.