Price of milk powder likely to rise

18 February 2012 12:26 am

In the wake of the huge increase in fuel prices and electricity bills, people are likely to be burdened further if the government approves a request from milk powder companies to increase the price of a 400 gram packet of milk powder by Rs.15.

The Consumers Affairs Authority said yesterday the distributors of brands such as Anchor, Nespray, Maliban and Diamond have citied the high cost of importing, manufacturing and distributing milk powder as a reason for their request.  

The companies have warned that their industries would be jeopardized unless an upward revision of prices was allowed without delay and have sought an appointment with Internal Trade Minister Johnston Fernando to discuss the crisis situation.

Company officials said the devaluation of the rupee by three per cent in the 2012 Budget, had a negative impact on milk powder importers, and the situation took a turn for the worse with the rupee depreciating to about Rs.120 against the dollar.

“We have to pay at the latest exchange rates when clearing shipments. It is a cost factor. Our distributors and agents are demanding a price increase because of the rise in fuel prices. The transport cost is the most serious cost factor at the moment,” a leading milk powder importer said and added that the fuel adjustment charge would also add to the production cost.

“Given these reasons, we asked for a price revision. We sent a letter to the Consumer Affairs Authority a few days ago in this regard. We are waiting for the reply,” the importer said.

In Sri Lanka, only 20 to 50 per cent of country’s milk requirement is produced locally. The rest is imported mainly from New Zealand. 

Meanwhile the milk powder companies had brought to the Minister’s notice that the global milk powder prices had not decreased but remained at US$3,900 for a tonne of milk powder.

However, Consumer Affairs Authority (CAA) Chairman Rumy Marzook said the price evaluation committee has not met yet to decide on these matters. (Kelum Bandara)