Milk powder price hike stopped
Mohammed Naalir
COLOMBO: There will be no hike in milk powder prices within
the next months, the Government assured consumers yesterday.
“The Government has abolished taxes on milk powder, incurring a loss
of Rs.3 billion annually, to afford relief to the masses,” Trade
Commerce and Consumer Affairs Minister Bandula Gunawardane said
yesterday.
Minister Gunawardane held extensive discussions on this issue with
President Mahinda Rajapaksa and leading milk powder importers. The
importers have pledged their cooperation towards this measure.
The Minister pointed out that milk powder prices are maintained at
Rs.195 for a 400 gram pack after milk powder has been categorised as an
essential commodity despite sellers seeking approval from the Consumer
Affairs Authority to increase the price by around Rs.50-60.
He said milk powder importers were facing a very difficult situation
as there has been a drastic rise in the prices of milk powder in the
world market mainly due to adverse climatic conditions in producing
countries. Milk producing countries including Australia were hit by a
severe drought last year, causing the deaths of a large number of
cattle.
“This was the main reason for the increase in milk powder prices and
it would take more than four years to bring the dairy industry back to
normal.”
He dismissed suggestions that local factors were behind the
anticipated price rise. “The prices have increased not due to any local
impact. No one can exert influence on milk powder prices in the world
market”, he added.
The prices of milk powder have increased by 212 per cent from 1997
levels. Since March this year world market ‘prices’ of ‘milk powder’
have increased from US$ 2,700 for a metric tonne to about US$ 4,000, a
48 per cent rise.
He explained that it was no longer possible for milk powder companies
to sell their products at prices imposed by the Government in this
context. “Several companies have stopped the import of milk powder due
to this situation,” the Minister remarked.
The country spends Rs. 1.8 billion every year to import milk powder
and the amount is expected to be increased to Rs. 2 billion this year.
Sri Lanka imports nearly 5,000 metric tonnes of milk powder monthly. |