Milk Powder pricing formula on the cards

In a bid to avoid the impending milk powder shortage countrywide owing to the action taken by importer companies to suspend their operations, the government has decided to introduce a pricing formula for imported milk powder within the next two weeks.

This was decided during a special meeting held with the representatives of the Ministry of Finance and the Ministry of Industry and Commerce on the prices of milk powder, the Consumer Affairs Authority (CAA) announced.

Accordingly, the representatives have decided to introduce a pricing formula for milk powder and the CAA has been instructed to take necessary measures in this regard.

This pricing formula is slated to change the prices of milk powder in comparison to the prices of the global market and depreciation of the rupee against the US$.

Several leading Sri Lankan milk powder companies have suspended the clearing of their stocks from the port as well as suspending new orders with their foreign suppliers after discussions with regard to pricing of milk powder held with the CAA and the Treasury ended in a dead lock recently.  

Milk powder companies cannot continue to run their businesses while the authorities resort to delaying tactics rather than taking measures to solve these problems in a prompt manner, importers said. They also warned that they are left with no choice but to stop imports, cancel new orders and to halt the sale of existing stocks of whole milk powder.

There could be a milk powder shortage in the country within couple of weeks if the government does not allow companies to increase the price of a milk powder packet, several milk powder company heads said.

According to them, milk powder companies are incurring a loss of Rs 30 to 40 million per month and they are now compelled close down operations if the government fails to grant them permission to increase the price of milk powder by Rs.100.