Milk powder prices to remain despite tax hike

Milk Powder Importer’s Association has stated that there will be no hike in the price of milk powder in the market even if the tax imposed on imported milk powder is increased.

The Trade Ministry increased the port and air service tax for imported milk powder by 10% with effect from last Friday (22) midnight.

A member of the Milk Powder Importer’s Association commented regarding this saying “It costs Rs.1,100 to one kilo of milk powder when it arrives at the Colombo port. The main reason for that are the inefficiency of local milk production and the ineffectiveness of local milk production projects in the last 20 years.

“More than 20,000 dairy cows have been brought from abroad, but all the animals have died by now.In the last 30 years, this is the highest amount of tax has been paid to milk powder,” he said.

“We can provide imported milk powder for Rs.600, 625 if there is no tax. In recent months, the milk trade decreased by more than 50%, so we have enough milk for the next two to three months, so a price hike is not necessary now. If the tax is not reduced, we will have to go for a price hike in December or January.”

Trade Commerce and Food Security Minister Nalin Fernando said : “We cannot reduce the price of milk powder too much because we want to protect the local farmers in this country, that’s why we tookthis step. They got a big relief because the price of milk powder in the world market went down in the past. Even if the tax is increased by 10%, if the price of milk is increased, we will take the necessary actions about it”.

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