Shortage in Amul supplies leads to butter crisis in Bengal

Due to acute shortage in supplies from Amul, West Bengal has barely received 10% of its butter demands in the last one and a half months. Since Amul caters to almost 95% of the demand of butter in the state, the shortfall is not met even by smaller dairies.

According to industry sources, Amul supplies 250-300 tonne butter in Kolkata every month. Supplies dwindled to 30 tonne last month.

Talking to FE, Gujarat Cooperative Milk Marketing Federation (GCMMF) chief general manager R S Sodhi said: "Production of butter at present is 20% less than last year's production at this time. This has created shortage all over India."

He said Amul's procurement of milk has increased by 12% in the first four months of the fiscal. "Our sales have also grown by 30% during April-July over the same period last year," he said. All these have resulted in a shortage of butter, Sodhi added.

According to Sumit Deb, managing director of Metro Dairy, production of milk in the northern part of the country has dropped due to drought. This has led to shortage of fat in the market. Butter, which contains 80% fat, is being sold at more than Rs 210 per kg, he said.

Sources in the industry said it makes more sense to import butter from Australia and New Zealand since price of butter there is $2,200 per tonne or Rs 108 per kg. "It comes to around Rs 158 per kg after adding 40% import duty and 5% port charge," said an industry insider. Amul has recently increased the price of butter from Rs 20 to Rs 21 per 100 gm.