DDC revises prices of its products following fall in demand due to Covid-19

The state-owned Dairy Development Corporation (DDC) has revised the prices of its dairy products along with reducing the milk collection from farmers citing a fall in market demand due to the ongoing threat of coronavirus.

According to the DDC, the demand for its milk has dipped by 24 percent in the Kathmandu Valley alone. DDC’s General Manager Rudra Prasad Poudel told Republica Online that the daily demand for processed milk in the Valley has gone down to 76,000 liters from 100,000 liters in normal times. Poudel said the fall in business activities and many households minimizing the use of the goods from outside amid soaring threat of the pandemic could have led to the drop in milk consumption.

Due to the fall in demand, the DDC has also revised the prices of a number of its dairy products. Poudel said a customer purchasing ghee directly from the DDC counter gets a discount of Rs 20 per liter. Similarly, the public enterprise provides a discount of Rs 80 per kg and Rs 10 per kg in purchase of butter and powder milk respectively.

In addition, the DDC has come with notable offers in bulk buying of its products. It provides a discount of 1% in cost to the customers purchasing 300-500 liters of ghee. The discount rate successively increases with the quantity purchase while the corporation provides 5 percent reduction in the cost for those who purchase ghee of more than 5,000 liters.

With a fall in demand, the DDC has also cut down the collection of fresh milk from farmers, citing the lockdown and coronavirus. Poudel said the corporation has curtailed the milk collection by around 12 percent. “In normal times, we used to collect 170,000 liters of raw milk from farmers which has now come down to only 140,000-150,000 liters daily,” he said.

The DDC collects milk from 900 cooperatives from 43 districts. A total of 150,000 farmers are associated with these cooperatives, according to Poudel.

With a fall in demand, the public enterprise now has a stock of unsold 900 tons of powder milk and 600 tons of butter. Similarly, the daily production of curd has also come down to 3,500 liters, a reduction by around 60 percent. “We are expecting to sell 30,000-35,000 liters of curd on Monday, the day marked as Asar 15 – the main day for rice transplantation,” Poudel said.

At the time when farmers are already suffering due to the heavy reduction in milk collection by private dairies, the DDC’s move is certain to hit the farmers with extra financial burden. According to Nepal Dairy Association, private dairies have reduced milk collection through the formal sector by over 50 percent after the lockdown. The dairies linked with the association are now collecting about 80,000 liters of milk on a daily basis whereas at normal times it was around 350,000 liters.

According to the Association, the collection of milk stands at 17 percent from the formal sector and 33 percent from the informal sector whereas about 50 percent of milk of the total production is consumed by the farmers themselves. The estimated loss of the private dairies stands out at Rs 2.5 billion per month.

 

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