Household budgets are likely to be hit hard and tea/coffee prices in neighbourhood tea shops are sure to go up as milk prices increase from June 1.

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 here on Wednesday that it would be increasing the price of milk by ₹4/litre from June 1.

Customers will have to pay ₹28 for a 500-ml packet of homogenised toned milk, which is priced at ₹26 now. The prices of other variants of packaged liquid milk and other milk products sold by Milma will also go up correspondingly.

In a statement, the KCMMF said a proposal in this regard was approved by the KCMMF board here on Wednesday. It said the hike was imperative and a long-pending demand of dairy farmers who were finding it difficult to sustain dairy farming because of the steep rise in the cost of production of milk.

The last time Milma hiked the price of milk was three years ago

The KCMMF added that of the ₹4 hike, ₹3.35 will go to dairy farmers and 25 paise to dairy cooperative societies.

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.

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 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. By passing on 87% of the hike to dairy farmers, Milma has ensured that they are the main beneficiaries of the hike,” KCMMF chairman K.S.Mani said.

When the new market price comes into effect, the procurement price for the farmers will go up from ₹40.04 to ₹43.39 / litre.

The federation’s decision to hike milk prices was taken months ago and the previous LDF government had ratified it. The implementation got deferred once the election model code of conduct came into place.