Thursday, 20 September 2007

The Government has taken steps to abolished taxes on milk powder, incurring a loss of Rs.3 billion annually, to afford relief to the masses. This was announced by Minister of Trade Commerce and Consumer Affairs Bandula Gunawardane yesterday addressing the media.

Minister Gunawardana stated that extensive discussions on this issue with President Mahinda Rajapaksa and leading milk powder importers were held and the importers have pledged their cooperation towards this measure.

Minister assured that there will be no hike in milk powder prices within the next months.
He further pointed out that the milk powder importers were facing a very difficult situation as there has been a drastic rise in the prices of milk powder in the world market mainly due to adverse climatic conditions in producing countries. Milk producing countries including Australia were hit by a severe drought last year, causing the deaths of a large number of cattle.

Minister pointed out even on this kind of a situation milk powder prices are maintained at Rs.195 for a 400 gram pack after milk powder has been categorised as an essential commodity despite sellers seeking approval from the Consumer Affairs Authority to increase the price by around Rs.50-60.

The prices of milk powder have increased by 212 per cent from 1997 levels. Since March this year world market ‘prices’ of ‘milk powder’ have increased from US$ 2,700 for a metric tonne to about US$ 4,000, a 48 per cent rise.

Sri Lanka spends Rs. 1.8 billion every year to import milk powder and the amount is expected to be increased to Rs. 2 billion this year and it imports nearly 5,000 metric tonnes of milk powder monthly.