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Local milk production drops amidst shortage

12 Jan 2022

  • Seasonal changes reduce milk output
  • Aggravates existing milk shortage in the market
By Shenal Fernando Due to the seasonality of milk production, local milk production has decreased since mid-December and is expected to remain at low levels until March 2022 at the earliest, thereby aggravating the milk shortage in the market following the constriction of milk powder imports due to the foreign exchange liquidity issues. Speaking to The Morning Business yesterday (11), Milco (Pvt.) Ltd. Chairman Lasantha Wickramasinghe stated that usually milk production in Sri Lanka tends to decrease close to the end of the year before recovering three to four months later. “Prior to this seasonal decrease in milk production, we were collecting around 250,000 litres of fresh milk daily. However, it has now fallen to around 150,000 litres,” stated Wickramsinghe. This is usually not a problem as milk importers are capable of filling the gap left by any decrease in local milk supply. However, due to the foreign exchange crisis in the country, milk importers are struggling to source the requisite stocks even for normal supply. Consequently, the demand for local milk has increased. In this juncture, this seasonal decrease in local milk production is expected to have a significant effect on consumers. However, Wickramasinghe did admit that the decrease in milk production we are observing currently might be have been aggravated beyond the usual levels due to the flooding observed over the past few months as well as due to the fact that the artificial insemination programmes was not properly executed last year due to the Covid-19-related restrictions. He further claimed that since the Government policy is to provide fresh milk to the people and considering the low milk production volumes, Milco has prioritised the supply of fresh milk to the consumer, over the supply of milk powder and other dairy based products such as butter. Speaking to The Morning Business, several wholesale distributors of local milk products claimed that due to the reduction in milk production volumes they are currently receiving only around 30% of their usual fresh milk volumes and that they are unable to source milk powder at all. The adverse effect of this development will be felt over the coming weeks as milk importers themselves are struggling to maintain stocks due to the forex shortage. Speaking to us last December, an industry source claimed that “most of the importers cannot get the consignments of milk powder because of the restrictions on the US dollars. I think most companies have placed the order but there is a delay due to the forex crisis”. He further claimed he expects the imported milk powder shortage to continue until early February at the earliest.


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