Amul raises cow ghee and butter prices from November 2 as milk fat runs short

The effect of higher ghee prices is now visible in the market. The Gujarat Cooperative Milk Marketing Federation, which sells milk and dairy products under the Amul brand, has raised the prices of cow ghee and butter. The increase has been in effect since November 2, 2026.

The price of Amul cow ghee in a 1-litre pouch has been raised from Rs 695 to Rs 735. A 500-gram pack of table butter, earlier priced at Rs 310, now sells for Rs 325. This is an increase of Rs 40 per litre for cow ghee and Rs 15 for a 500-gram pack of butter.

Though milk production in India is rising, dairy companies are struggling with a different problem. They are getting milk, but it lacks fat, which is what ghee and butter require.

Ordinarily, when milk production rises in the country, ghee and butter prices stay under control, but this time the situation is different. India's milk production was 165.1 million tonnes in 2016 and rose to 216.5 million tonnes by 2025, a sizeable increase over the past 10 years. Even so, dairy companies are unable to extract the fat they need from milk.

Milk has two main solids: fat and SNF, or solids-not-fat (the source describes it as skimmed milk fat). SNF contains protein, lactose and minerals. Ghee and butter need fat, which is why the shortage of fat remains a problem for companies even after milk output has grown.

Between October 2023 and October 2026, the average dairy-company-level price of butter rose from Rs 348 per kg to Rs 537 per kg, an increase of about 54.3 per cent. In the same period, the price of skimmed milk powder rose from Rs 250 to Rs 295 per kg, an increase of about 18 per cent.

Ghee becoming costlier despite the GST cut may seem odd. From September 22, 2025, GST on ghee and butter was reduced from 12 per cent to 5 per cent. GST on ice cream fell from 18 per cent to 5 per cent.

The GST reduction raised demand for these products. More people began buying ghee, butter and other dairy products, which also increased the need for milk fat. According to R. S. Sodhi, former managing director of GCMMF, the GST cut further raised demand for dairy products with higher fat content.

After the Tirupati temple laddu case surfaced in September 2024, action against sellers of adulterated ghee intensified. The FSSAI and state food safety departments then began action against makers of adulterated ghee, substandard milk and fake paneer. As a result, demand rose in the market for genuine milk and dairy products with higher fat content.