Aavin raises prices of ghee, butter, curd and sweets from 28 October ahead of Diwali; milk packets unchanged

The reports give these figures for the revised prices.

The old prices are given differently in different reports. For butter, the 100 g pack rises from Rs 60 to Rs 70 in most of them. For ghee, the 100 ml pack goes up from either Rs 80 or Rs 85 to Rs 95, and one source says the 200 ml pack goes to Rs 180 from Rs 160. Gulab jamun in the 250 g pack goes to Rs 115 from Rs 100, and Mysore pak to Rs 160 from Rs 140. Curd and milkshakes also cost more. Buyers should check the price list on the pack or in the Aavin parlour, since the figures in the news reports are not an official list.

The timing

The increase comes in the week before Diwali, which is the time of the year when the demand for ghee, butter and sweets is at its highest. Households use ghee in cooking and in prayers, and sweets are bought in large quantities for gifts. The federation has not explained why it chose this date, but the effect is that the largest buying season of the year will be at the new prices.

It is also the first increase in the prices of ghee, butter and other products since the present government of Chief Minister C. Joseph Vijay took office, according to one report, which makes it a political issue as well as a commercial one. The opposition has not yet reacted in the reports that are available.

The federation points to the rising price of the raw material, which in the dairy trade means milk fat and milk solids. Dairy cooperatives pay farmers a procurement price, and when that rises, the cost of making ghee and butter rises faster, since it takes a large quantity of milk to make a kilogram of ghee. Costs of packaging, transport and power add to the pressure. The federation has also kept the price of milk, which is the product that most households buy every day, from going up, according to the reports, and a rise in the price of the processed products is one way of covering the cost without touching the price of milk.

For a household that uses a small amount of ghee and butter, the change is a matter of a few rupees on each pack, but the total effect will be noticeable for families that buy sweets in bulk or run small food businesses. The reports say that the increase will affect household monthly grocery budgets across the state.

Private brands that compete with Aavin have their own prices, and the change may narrow or widen the gap with them. Aavin has a reputation for lower prices than private brands, and customers will watch whether that remains so. For the farmers who supply milk to the cooperative, a higher price for products can support a better procurement price, though the reports do not say whether any change in what the farmers are paid is planned.