Aavin raises milk procurement price by Rs 3 per litre to Rs 41
Tamil Nadu’s Aavin has increased the milk procurement price from Rs 38 to Rs 41 per litre, benefiting an estimated 3.16 lakh dairy producers. The move is expected to add about Rs 30 crore a month to the state’s costs; no consumer price change was specified.
What happened
Tamil Nadu has raised Aavin’s milk procurement price to Rs 41 per litre from Rs 38, supporting 3.16 lakh dairy producers amid higher feed and labour costs. The
Key facts
- Procurement price raised from Rs 38 to Rs 41 per litre
- Rs 3 per litre total increase
- 3.16 lakh dairy producers expected to benefit
- 8,800 dairy cooperative societies
- 34 lakh litres procured daily
- 31 lakh litres sold to consumers daily
- Rs 30 crore additional monthly state cost
- Rs 360 crore additional annual state cost
- Previous Rs 38 per litre rate was effective from November 1, 2022
Why this matters
The move deepens Aavin’s strategic position with 3.16 lakh dairy producers, potentially improving cooperative loyalty and limiting rivals’ ability to secure local milk volumes.
What to watch
- Official clarification on whether Aavin retail milk prices will remain unchanged and for how long.
- Tamil Nadu budget allocations, subsidy releases or compensation specifically linked to Aavin procurement costs.
- Procurement volumes after the increase, especially whether additional supply offsets the higher per-litre cost.
- Farmgate price revisions by private dairy processors and competing cooperatives.
- Retail price changes in Aavin value-added dairy products and any rise in consumer food-inflation readings.
- Tamil Nadu government may announce budgetary support or reimbursement for Aavin's additional procurement outlay.
- Aavin may review prices of curd, ghee, butter, paneer and other value-added products before changing liquid-milk prices.
- Private dairies operating in Tamil Nadu may raise farmgate rates to retain suppliers, increasing sector-wide milk procurement costs.
- Higher producer payments may improve milk supply retention and reduce farmer switching to private buyers or alternative livestock activities.