KMF said the hike was in a bid to keep up with market trends and also ensure continuity of payment of ₹4 per litre to the farmers.
| Photo Credit: file photo
The Karnataka Milk Federation (KMF) effected a steep increase of nearly 15% on the price of its popular product, Nandini ghee, from Wednesday.
A kilogram of ghee that was being sold at ₹610 has been increased to ₹700. Similarly, the price of butter has been revised from ₹544 per kg to ₹570 per kg, a rise by about 4.78%.
KMF said the hike was in a bid to keep up with market trends and also ensure continuity of payment of ₹4 per litre to the farmers.
The federation had reduced the cost of ghee from ₹650 per kg to ₹610 per kg after the new tax slabs in the Goods and Services Tax in September. The last hike was effected in the beginning of 2025. The KMF, on an average, sells about 2,500 tonnes of ghee every month.
Passed on to farmers
“Since April 2025, when milk price was increased by ₹4 per litre, we have not reduced the procurement price for farmers. We passed on the entire amount to the farmers. It cost us about ₹4 crore a day. Since a stable payment is being given, milk procurement has not gone down as well. The hike is to ensure continuity in the payment to farmers,” KMFmanaging director B. Shivaswamy said.
On an average, the daily procurement remained at 1 crore litres. Milk procurement in November last year averaged 89 lakh litres daily.
To offset losses
He said that the hike will help KMF offset losses in conversion of milk to skimmed milk powder (SMP). Currently, he said, that about 15 lakh litres of the 1 crore kg being procured from farmers are being converted to SMP while about 65 lakh litres are being sold as retail and bulk milk. Another 12 lakh to 13 lakh litres are being used to produce milk byproducts.
“The prevailing market price of SMP is about ₹240 to ₹250 per kg whereas the break-even cost is about ₹260 or above. About 8 lakh litres are being supplied to Ksheera Bhagya scheme. The KMF will be able to recover a part of the cost with the ghee price hike,” he added.
Justifying the hike, another KMF official said that the price of ghee or butter had not been revised recently though the international price had shot up. Currently, a kilogram of butter in a 25-kg bulk box in the international market is about ₹560, the official said, adding that despite the increase Nandini ghee is among the cheaper ghee available in the market.
Amul may follow
“The cost of ghee sold by private dairies are still higher. Though Amul is selling ghee at ₹640 per kg, it is also expected to follow KMF. While Amul had raised the price of ghee in other markets, it did not increase the price in Karnataka because KMF ghee was cheaper,” the official said.
“The demand for ghee is more but product availability is less. We also need to adapt to market conditions. Amul maintains dynamic pricing for its products,” sources added.
Published – November 06, 2025 12:24 am IST
