Kerala's dairy cooperative giant Milma has approved a ₹4 per litre price increase effective from June 1, 2026, as reported by The Times of India. The decision was finalised during a board meeting of the state-run dairy cooperative on May 20 after receiving approval from the state government. The price revision comes amid rising production, procurement and distribution costs, with the cooperative citing mounting pressure on farmers as a key factor. The Kerala Co-operative Milk Marketing Federation (KCMMF), whose Milma brand accounts for close to 85% of the liquid milk market in the State, announced the hike as imperative to support struggling dairy farmers who were finding it difficult to sustain dairy farming because of steep rise in production costs.
According to Milma Chairman K S Mani, as reported by The Times of India, the bulk of the hike will directly benefit dairy farmers. Farmers will receive ₹3.35 per litre of the total ₹4 increase, while dairy cooperative societies will get 25 paise. Milma Chairman emphasized that as a collective of farmers, the decision is to pass on the lion's share to them. With the revised rates, a 500 ml packet of homogenised toned milk currently priced at ₹26 will cost ₹28. The board meeting observed that drastic rise in production costs and low returns had hit the dairy farmers in the State hard, making a price increase inevitable to sustain the dairy sector.
Speaking to reporters after the board meeting, Milma Chairman K S Mani revealed that the proposal to revise milk prices had been discussed during the tenure of the previous LDF government, which had given its consent for the price hike. However, the matter was subsequently deliberated by the Board of Directors as well. According to Mani, since the Model Code of Conduct was in force at the time, it was suggested that the decision be implemented only after the restrictions came to an end. The Model Code of Conduct remained in effect in the state until May 6, which explains the timing of the announcement and implementation.
The latest price hike addresses multiple cost pressures beyond traditional production expenses. As reported by The Times of India, the board identified drought-like conditions in several parts due to extreme summer and increase in price of milk procured from neighbouring states to make up the domestic deficit** as key factors. Additionally, geopolitical unrest in the Gulf region and subsequent rise in fuel prices had resulted in sharp rise in transportation and distribution costs of milk and milk products. The processing, packing and distribution costs had also gone up due to supply chain disruptions and higher price of essential materials like LDPE film, plastic bottles and cups.
According to Milma, as reported by The Times of India, more than 83 per cent of the additional amount generated through the hike will be passed on to milk producers. This substantial farmer benefit ratio demonstrates the cooperative's commitment to supporting its dairy farming community amid rising operational costs. When the new market price comes into effect, the procurement price for farmers will increase from ₹40.04 to ₹43.39 per litre. KCMMF Chairman K.S.Mani stated that the decision to increase the price of milk was necessary to ensure that dairy farmers received a remunerative price so as to sustain them in the vital sector, with Milma passing on 87% of the hike to dairy farmers as the main beneficiaries.
The price hike will significantly impact household budgets across Kerala, with tea and coffee prices in neighbourhood tea shops expected to increase correspondingly. Milma, which sells about 18 lakh litres of liquid milk daily across the State, procures about five to six lakh litres daily from outside the State to make up for the shortfall in domestic production. The cooperative's substantial market dominance means the price increase will have widespread effects on the state's dairy market, with other variants of packaged liquid milk and milk products also going up correspondingly. The Milma price revision comes amid a broader trend of milk price hikes across India's organised dairy sector, with major dairy brands also revising prices upward due to increasing feed costs and farmer procurement prices.
