After state milk cooperative Aavin, the private dairies are also expected to increase milk prices as they pay slightly higher prices.

Reacting to the price hike, Shanthi Rangaraj, who works in a central government undertaking, told IANS: 'It is certainly a dampening news what with sugar prices already ruling over Rs.30/kg. Prices of other milk products like butter, ghee, milk sweets will also go up. It is bad news with the festival season round the corner.'

'It is not just the number of coffee cups I drink that would be cut, I will have to cut half a litre daily in the milk consumption,' she added.

Hotels and tea shops are expected to increase the price of coffee, tea and milk sweets.