With the market for skimmed milk powder (SMP) looking up again after a long hiatus, Aavin has found buyers for its stock of about 12,000 tonnes.
“Recently, cooperative federations from Bihar, Andhra Pradesh and Kerala approached us for SMP for supply to schoolchildren through various schemes. We sell SMP only through the national platform meant for cooperatives. We do not sell if the prices lead to a loss to our 25 district unions,” said R. Nantha Gopal, Managing Director, Tamil Nadu Cooperative Milk Producers’ Federation, whose popular brand is Aavin.
Pricing dynamics
Stating that prices in the market had improved, Mr. Nantha Gopal said the cost of production for one kg of SMP was ₹200 for Aavin.
“This includes the price of transportation. If the distance between the dairy and the milk procurement centres is not much, the cost can come down to ₹180. So, we decide the selling price according to what we spend. But in the case of cooperatives we don’t mind not getting a profit,” he said.
Aavin sells around 500-800 tonnes of powder every week and about 25 lakh litres of milk a day. It procures about 32 lakh lakh litres of milk a day. The surplus milk is used to make ice cream, butter, ghee, flavoured milk and SMP.