Aavin suffers Rs 2.3 cr loss after selling milk powder at below market prices

The decision to sell 1,000 tonnes of milk powder to two enterprises in a bid that was below the market prices has also disappointed the dairy farmers. Aavin was prompted to sell the milk powder to private and government agencies in other States due to accumulation of more than 3,000 tonnes of milk powder, including 1,000 tonnes in Vellore/Tiruvannamalai Milk Producers’ Union, said sources.

The federation usually participates in the e-auction conducted by National Cooperative Dairy Federation (NCDF), that offers high prices to various milk products, every Monday. The market rate for milk powder at the beginning of the month was Rs 270 a kilo.

According to the documents with DT Next, the federation in a letter dated August 1, 2019, agreed to provide 250 tonnes of milk powder each to two units of a private company, Srinithi enterprises, at Rs 247 a kilo. The New Delhi unit had to take the stock from the Salem and Madurai dairies while the Puducherry unit of the company had to take it from the Velloredairy.

Similarly, Aavin sold another 500 tonnes at the same price to Paranjothi enterprises, a company based in Pallakad in Kerala. The federation asked the company to take delivery from the Tiruchy district union.

An official on condition of anonymity said, “We lost Rs 23/kilo. The 1,000 tonnes sold to private companies at Puducherry, New Delhi and Palakkad have led to a loss of Rs 2.30 crore.”

However, the officials were irked after Aavin sold another 116 tonnes of milk powder to Kerala Cooperative Milk Marketing Federation (MILMA) at Rs 265/kilo. In a letter dated August 2, MILMA has requested Aavin to supply another 42 tonnes to its Ernakulam branch at the same rate.

According to officials, Karnataka Milk Marketing Federation has stopped the sales of milk powder for the last two weeks as prices were going up.

Following the incident, fuming milk producers immediately wrote to the Chennai federation office. However, the Chennai unit advised the farmers not stage any protest as thegovernment was planning toincrease the milk procurement prices.