New Delhi: Still on the fence about whether to cook shahi paneer or butter chicken for your weekend dinner party? Before you whip out that recipe book, here’s a lesser-known fact that might help you make a decision — paneer, or cottage cheese, is costlier than chicken.
Chicken currently costs around Rs 274 a kg, while paneer is priced at Rs 320 a kg — a difference of nearly Rs 50.
Wholesalers ThePrint spoke to pinned the increased cost of paneer on the rising prices of milk. According to an analysis by ThePrint, the rate of inflation for milk and dairy products has consistently exceeded the rate of inflation for all goods and services in the country over the last 20 months.
According to the analysis, the rate of inflation in the ‘milk and milk products’ category of the Consumer Price Index (CPI) has accelerated nearly every month since July 2021 to February 2023, apart from marginal dips in February 2022 and July 2022. The data also shows that, since October 2022, inflation in milk prices has surpassed the general rate of price rise in the country, and this gap has been widening.
Data from the Reserve Bank of India shows that the CPI for milk and its products had begun to rise in July 2022 (meat: 3.0, dairy: 5.8), and peaked in March this year (meat: -1.42 and milk: 9.31). ‘Meat’ here includes all kinds of meat and fish.
Meanwhile, data from the Department Of Consumer Affairs shows that the average price of a litre of milk went up to Rs 56.80 on 4 April 2023 from Rs 51.40 on 4 April 2022 — an increase of 10.5 per cent in one year.
A Delhi wholesaler who didn’t want to be named told ThePrint that until 2021, paneer was sold at Rs 220 per kg. By January this year, the price had gone up to Rs 290 a kg. In contrast, the CPI for poultry did not increase substantially — to Rs 208/kg in January 2023 from Rs 198/kg in February 2021 — even though the poultry industry continues to grow in India because of changing dietary preferences.
Speaking to ThePrint over phone, R. S. Sodhi, president of the Indian Dairy Association — the apex body for the dairy industry — attributed the rising milk prices to lower production and the gap between demand and supply to the Covid-19 pandemic.
“In the last 15 months, there has been a 14-15 per cent rise in milk prices, whereas in the past 36 months, the increase was only 18-19 per cent,” Sodhi, former managing director of Gujarat’s Anand Milk Union Limited (Amul), further said.
Also Read: ‘No other option’ — behind Amul price revisions, a battle against soaring costs in Gujarat’s dairies
Poultry vs dairy products
According to a 2022 report by the company Expert Market Research, an increase in disposable incomes and evolving dietary preferences are driving up the Indian poultry market.
The value of the Indian poultry market reached close to USD 28.18 billion in 2022 and is expected to grow at a Compound Annual Growth Rate of 8.1 per cent between 2023 and 2028 to USD 44.97 billion, the report further said.
Government data shows that the Wholesale Price Index for chicken throughout India during FY22 was over 162 and that from the base year of 2012, the price index value for chicken climbed by nearly 62 per cent.
Data also shows that there’s been an overall increase in price index for poultry from FY13.
On the other hand, government data for dairy products shows that WPI exceeded 149 in FY22. Like chicken, there’s been an overall increase in the price index for dairy products from 2013.
In December 2022, leading milk distributors Amul and Mother Dairy raised the price of full cream milk by Rs 2 per litre citing an increase in input costs.
For instance, until mid-October, the Gujarat Cooperative Milk Marketing Federation, better known as Amul, charged Rs 62 a litre for their full cream-milk as compared to Rs 52 a litre for their toned ‘Taaza’ milk. In December, however, prices went up to Rs 66 for full-cream milk and Rs 54 for the toned variety.
A second wholesaler based in Delhi attributed the rise in paneer prices to the increase in the cost of full-cream milk.
“Milk prices have increased due to less fat (in the milk),” the wholesaler told ThePrint. “Buffalo milk has a lot more fat so we increase the prices for paneer too. Otherwise, it’s a loss for us.”
According to Sodhi, at the root of the problem is low milk production.
“During Covid, while milk production was on the increase, consumption had been reduced. Due to demand reduction, surplus milk was converted into commodities which led to a price rise. The farmers were affected due to the rise in feed cost and hence were not inducting new animals or feeding them more. Delay in artificial insemination too has now led to a supply gap, and therefore we see a price rise for dairy products,” he told ThePrint.
(Edited by Uttara Ramaswamy)