Milk companies threaten to stop imports

Milk food traders have threatened to halt imports and close down packaging factories if the Government does not allow a price increase.

Hit by the declining rupee value, importers say the decision by the Consumer Affairs Authority (CAA) not to allow a Rs 15 price increase for a 400 gram pack, was adding to their losses.

A senior CAA official said a letter was sent to milk powder importers on Monday informing them to maintain the price level which prevailed on May 2 last year. The price of a 400 gram packet of milk powder in the local market is Rs. 260 at present.

Sri Lanka’s annual consumption of milk powder is about 58,000 metric tonnes, of which 50,000 metric tonnes were imported, industry officials said, pointing out the heavy dependence on imported milk powder.

Along with the devaluation of the rupee, the import price of milk powder has increased. “We have been asking the CAA to increase the price along with the devaluation of the rupee. We don’t receive any profit and the loss we are incurring is increasing,” said Maliban Milk Powder Company Chief Executive Officer D.l.weerasuriya. He said the companies were selling milk food at a reasonable price.

He noted that the government had restricted the margin of profit for a 400 gram packet of milk powder to 4%. Mr. Weerasuriya said the devaluation of the rupee has resulted in milk powder importers incurring a loss of Rs. 37 on the sale of a kilogram of milk powder in the market, even earlier. Now that loss has increased to Rs.58.

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