Milk crisis curdles, PM to chair meeting

By Kushali Atukorale
Prime Minister Ratnasiri Wickremanayake is set to chair a crucial meeting today to be attended by Trade and Consumer Service Minister Bandula Gunawardena and Secretary, Ministry of Finance P.B. Jayasundara, to discuss the acute milk shortage and the staggering price hike demanded by the milk powder importers.

Meanwhile, acting Chairman, Consumer Affairs Authority, Dr. R.M.K. Ratnayake noted that the demand put forward by the importers to increase a 400g milk powder packet to Rs. 305 from the present selling price of Rs. 195, was not possible.

Ratnayake told The Bottom Line that, “Dealers who import milk powder, are asking to increase the price of a 400g packet to Rs. 305 from Rs 195, where as the price can be increased only up to around Rs. 270 for 400g.”
According to him, the main reason for the shortage of milk powder was the increase of the price of crude oil to US$ 90 per barrel and the mad cow disease, which affected many European countries. “The increase in the demand for milk products in China and India, added to the crisis,” he said.

Ratnayake also criticised local farmers for failing to improve their output.
Meanwhile, Managing Director, Fonterra Alastair De Raadt said that Australian milk production reduced by 25%, due to the drought. On the other hand, milk production in New Zealand had increased by 2.5%. Yet, it was revealed that the production in New Zealand was insufficient to cover the gap, as Australia is one of the major milk producing countries.
During a joint press conference on Monday, the importers warned of a massive shortage, much worse than the present situation, if the authorities do not allow them to increase the prices.

Already, supermarkets and even small boutiques have run out of popular milk powder packets. Some of these outlets have put up notices informing consumers that no more than a couple of packets would be sold per customer.