Amul cuts butter supplies by 25% on low milk output

CHANDIGARH/AHMEDABAD: Blame it on poor monsoon if your toast goes without butter for the next two weeks. Low milk production has led the country���s top butter producer Amul to cut its supplies by 25%. The shortage is so acute in the 16,000-tonne branded butter market that even marginal players like Britannia, Mother Dairy, and Verka are not able to fill in the void left by Amul. Though the players are witnessing a rise in demand for their products, they are still unable to meet the demand.

The branded butter market in India is worth Rs 1,000 crore and Gujarat Co-Operative Milk Marketing Federation (GCMMF) that markets Amul brand of dairy products controls about 90% of it. As reported by ET earlier, milk production that usually rises post monsoon, may see a shortfall owing to the delayed monsoon. According to estimates, the demand for butter is growing at 7-8% annually. The demand typically shoots up during the festival season.

However, the Rs 6,711-crore Amul, has no inventories despite its 13 district member union network. The co-operative says it will be able to resume supplies normally only after its members start procuring higher milk quantities. So far, GCMMF, that gives priority to liquid milk, has managed to retain stable supplies.

���The demand for milk and milk products has gone up by around 30% this year. Delayed and poor monsoon has worsened the situation. Meanwhile, reports on adulteration in milk and butter early this year have compelled a large section of consumers to opt for a trusted brand like Amul,��� GCMMF chief general manager RS Sodhi said.

Meanwhile, the situation is severe in the north where demand for milk fat shoots up ahead of the festive season. ���We market close to 400 tonne of fat that goes as high as 600 tonne during the festive season. Now, we are facing acute shortage of milk fat on account of longer summer that has affected milk procurement by 20-30% compared to the corresponding period in the previous year, said VK Singh, MD, Milkfed that markets Verka brand of dairy products.