Price-hike delay suckles milk powder shortage

As the milk powder scarcity created by a shortsupply continues to hit consumers hard, the Consumer Affairs Authority (CAA) says it is still studying the request for a price increase by companies.

CAA Chairman Rumy Marzook said a committee was looking into the financial status of the milk powder companies because they had sought the price hike claiming it was not financially viable for them to sell their products at the current prices.But the CAA chief said the authority was also receiving complaints from the public about the high prices. “We cannot increase the prices haphazardly,” he said.

Sri Lanka meets only 17 per cent of its demand for milk through domestic production. The rest is imported. According to Customs statistics, the country imported 83,817 metric tonnes of milk powder in 2012.

The Fonterra group, which distributes Anchor and Ratthi brands and accounts for 60 per cent of the local milk powder market, said that with global dairy prices increasing, it was unable to increase production to meet the current demand.

The group said it had been discussing a price hike with the authorities. Chrishantha Fernando, country manager of Milgro, said milk powder companies with a smaller market share were the worst affected by the delay in granting a price hike.

“The last price revision was made in May 2012, and accordingly the price of a 400g pack was set at Rs. 325. During the past year, world market prices have reached upto US$ 5000 per metric tonne. Since April last year, we have been requesting the Government for a price revision,” he said.