Consumer spending on liquid milk has increased by Tk 10 a litre as market leader Aarong has increased maximum retail price to Tk 100 a pack.
A half litre pack of Aarong milk, a product of Brac Dairy, has been set at Tk 50 from Tk 45, according to city groceries.
Other leading companies like Pran RFL and state-patroned Milk Vita, however, are yet to increase prices of their branded products.
Market observers are critical of such a hike at a time when the interim government has been in a tough ride to bring down commodity prices which have skyrocketed exorbitantly in recent months after the fall of the fascist regime.
Aarong and other companies' milk prices were increased last in August 2022 when it was lifted to Tk 90 from Tk 80, according to the Department of Livestock Services (DLS).
Contacted, Mohammad Anisur Rahman, senior director of BRAC Enterprises, told the FE that due to rising costs across multiple sectors, BRAC Dairy has decided to increase the price of Aarong milk by Tk 10 per litre, effective from 01 November 2024.
The price of livestock feed has significantly gone up, leading to the increased milk production costs at the farmer level.
Consequently, the price paid to farmers for raw milk has also been raised by Tk 5.0 per litre.
This is the first price adjustment for BRAC Dairy products since July 2022. Over the past two years, the costs of essential raw materials such as packaging, cartons and spare parts have increased by 20-40 per cent.
After a thorough analysis of multiple factors, BRAC Dairy has implemented the new pricing.
Dipankar Mandol, managing director of Milk Vita (Bangladesh Milk Producers Cooperative Union Limited), told the FE that the cooperative union had not taken any decision to hike price.
He said the company was now supplying 0.15 million litres of dairy products a day of which liquid milk comprises 0.10 to 0.12 million litres.
PRAN RFL Director Kamruzzaman Kamal told the FE that his company is yet to review price though appreciation in US Dollar, rising production costs followed by higher packaging costs, the inflation in the last 14 months have been hitting hard the businesses.
He said despite such odds, PRAN RFL is unlikely to review price for now.
According to city groceries, Aarong Dairy is now market leader in Dhaka.
PRAN RFL says its daily supply is 0.25 million litres while Milk Vita contributes 0.15 litres a day.
Value chain expert and farm economist Prof ASM Golam Hafeez said it is logical that companies review prices based on rising operating costs.
"But the situation should be taken into consideration," he said.
He said the interim government is now trying its best to bring commodity prices within the reach of commoners.
But such a notable hike in milk prices would hamper its effort, he said.
He urged BRAC Enterprise and other private companies to keep price of milk static for next few months.
Asked, DLS Director (Production) Dr ABM Khaleduzzaman told the FE over whatsapp that private companies are still not bound to discuss the matter with DLS.
The country's domestic production of milk is 9.9 million tonnes against a demand for 15 million tonnes, according to DLS.
The country also imports 0.12-0.14 million tonnes of powdered milk to meet a shortfall.
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