‘Importers might sell milk powder higher than market fixed price’ – The Morning


  • Milk Powder Importers’ Assn. says Rs. 2,545 per kg is market price
  • Importers might increase prices further depending on costs incurred 



By Imsha Iqbal 

Despite the fixed market price of 400 g and 1 kg packets of milk powder being at Rs. 2,545 and Rs. 1,020, respectively, importers might sell it at a higher rate depending on the unforeseeable costs they might incur in the process of importing said items, The Morning Business learns.

On Monday (16), the price of a 1 kg packet of milk powder increased to Rs. 2,545 and the price of a 400 g packet of milk powder has been increased to Rs. 1,020.

A representative from the Milk Powder Importers’ Association told The Morning Business that even though the market prices are as mentioned above, certain dealers might increase the prices, depending on the costs they had to endure during importation.

On Monday, The Morning reported that the milk powder importers are increasing the price of milk powder according to their own wishes, and that the current price increase has not been decided by the Association.

Prices of imported milk powder were increased on Monday primarily due to the devaluation of the Sri Lankan Rupee (LKR) and shortage of foreign exchange to service import expenditure, the Association stated.

The representative had stated: “The main reason (price increase in the imported milk powder) is that the devaluation of the rupee, as two months ago, the rupee was around Rs. 200 and now it is around Rs. 350 to Rs. 370.”

He said that the majority of milk powder consignments are imported from New Zealand or Australia, and the rest of the requirement is imported from Europe. 

He stated that when these said consignments arrive in bulk, they need to be packed in an airtight bag and in cardboard packaging, and the packing cost has increased by almost 30-40% while some of these materials such as corrugated carton, are imported.

At the same time, the Milk Powder Importers’ Association representative emphasised that the increasing cost of energy has become another factor that has resulted in the price increase.

“The fuel cost on furnace oil for factory operations as well as for the transportation has gone up relative to the price increase of fuel. At the same time, the raw material for milk powder in the global market kept increasing till about the end of April. Accordingly, the price of milk powder has gone up about 20% globally during the period from January to April,” he continued explaining.

Apart from the rupee depreciation, with the dollar crisis, banks are unable to open Letters of Credit (LCs). However, this is not only impacting milk powder, but all commodities that are imported, he stressed. 

“The importers are struggling to import because the banks do not have sufficient dollars. For example, if you usually import 100 units, now you can import only 20-30 units, as the importers are unable to import per their requirement,” said he explaining the bottomline of the shortage in the market.      

Nevertheless, he stated: “Hopefully in May, due to the milk powder stock that was already imported, the price would be decreased,” referring to the ordered stocks that have yet to reach the country. 

Responding to the inquiry made by The Morning Business regarding the survival of the milk powder importing industry since the purchasing power of consumers has gradually decreased, he said that it would be difficult for the industry as well as the 200-300 salespeople and distributors.  

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