TIRUPPUR: Following GST reduction from 12% to 5% for products like butter and ghee, prices have come down in Uthukuli, a hub for their production in Tamil Nadu. Manufacturers have said the prices will decrease further after the festival season. Currently, the price drop ranges from 4% to 6% across farms in the region.
This generational industry in Uthukuli is seeing a drop in the number of companies involved in butter and ghee production. Existing manufacturers have been blaming low profit, previous GST reforms from nil to 12%, manpower shortage, etc. Additionally, they have been continuously requesting the central and state governments to take appropriate steps to remove GST completely to revive the industry.
S Sakthivel, owner of Sakthivel Dairy Farm, said, “Due to GST reduction, the price of butter has come down from Rs 580 to Rs 545 per kg. Ghee price reduced from Rs 784 to Rs 735 per litre. Decreasing prices will increase procurement, which will bring in orders.”
“As it is festival season, the demand and price for ghee and butter has increased as the price of raw materials has increased. We usually produce three tonnes of butter and ghee per week, but currently we are producing up to four tonnes. Prices will drop further after the festive season,” he added.
N Siva, owner of SR Dairy Farm, said, “Though the current GST reduction is comforting, it should be repealed completely. On Monday, prices for butter and ghee have come down from Rs 575 to Rs 540 per kg. Ghee prices have decreased from Rs 785 to Rs 750 per litre. However, there will be major price changes only after the festival season.”
S Chinnasamy, district secretary of TN Farmers Association (CPI), said, “Prices will come down due to GST reduction, which will increase orders and demand for raw materials. Farmers who are milk producers will benefit from this.”