• Shortage will persist for as long as dollar crisis: Importers
• Low income families and canteen owners affected
• Get used to drinking fresh milk: Trade Ministry 

By Uwin Lugoda Sri Lanka’s milk powder troubles are continuing with inadequate supplies in the market as prices remain high, impacting the daily lives of many Lankans. Importers told The Sunday Morning that a deficiency in supply and resulting higher prices would remain until Sri Lanka found permanent solutions to its foreign currency crisis.  The milk powder saga began late last year, around October, and has continued to date, impacting the lives of all consumers, especially lower-income families and small business owners. The problem was brought on by the ongoing foreign exchange crisis in the country and has also led to two price hikes within this period.  The first price hike came into effect in early October 2021, when the Milk Powder Importers’ Association (MPIA) hiked milk powder prices following the Government’s decision to remove the control prices imposed on several goods.  Accordingly, the price of a 1 kg packet of milk powder was increased by Rs. 250 to Rs. 1,195 while the price of a 400 g packet of milk powder was increased by Rs. 100 from Rs. 380 to Rs. 480. The second price hike came on 30 December, when the price of a 1 kg packet of milk powder, which was at Rs. 1,195 was increased by Rs. 150, reaching Rs. 1,345. The price of a 400 g packet of milk powder was also increased by Rs. 60 making it Rs. 540. MPIA Media Spokesman Ashoka Bandara pointed out that the shortage of milk powder was mainly due to the importers not being able to open Letters of Credit (LCs) from banks due to the shortage of US dollars in the country. He explained that this shortage would persist until the country sorted out its foreign exchange issues. “This issue has been ongoing for the last six months and will continue until the dollar crisis is sorted out. We have lobbied with the Government for relief on the matter, but it is yet to come,” said Bandara. Impact on the public and small businesses Speaking to The Sunday Morning, the All-Ceylon Canteen Owners’ Association (ACCOA) stated that these price increases had only affected lower-income and daily wage workers, who could not afford the current price of milk powder/milk-related items. They explained that these prices were still affordable for higher-income earners in the country. The ACCOA Chairman Asela Sampath stated that the sale of milk tea in their hotels and canteens had greatly reduced following these price hikes. “Whether it is a small, roadside hotel or a canteen in a Government office, our first sale of the day used to be milk tea. At offices, we saw people buying milk tea twice a day – once in the morning and once at night. But now, we see them avoiding milk tea completely or opting to buy plain tea,” said Sampath. He explained that the price hike of milk powder had resulted in a hile in the price of a cup of milk tea to Rs. 80, which was unaffordable for many. Sampath stated that most people’s sole reason to enter their establishments was for a cup of tea; as such, the number of people entering canteens has also reduced, along with the sale of food products that are usually purchased alongside milk tea. Following news of the second price hike in December 2021, the ACCOA decided to withdraw from the sale of milk tea altogether, as consumers could not afford the high prices. Due to this, Sampath suggested that the Government should focus on improving Sri Lanka’s domestic milk production without waiting for imports. Meanwhile, consumers have expressed concerns regarding the shortage, revealing that they have begun to ration milk powder due to the current prices being unaffordable. “My wife, eldest daughter, and I have now got used to not using milk powder, but my two younger children ask for milk in the morning. We can’t afford to buy fresh milk every day. Both my wife and I are day wage earners and the cost of living is too high for us to bear. When milk powder is available, it is about Rs. 100-200 more than earlier and we have to wait in line for hours to get it,” Nimal Gunasiri, a 45-year-old three-wheeler driver from Hokandara, told The Sunday Morning.  Gunasiri’s sentiments were shared by Nuwan Marasinghe, a 26-year-old construction worker in Rajagiriya. “If we can’t have a cup of tea the way we like it, what’s the point? I work a 10-12-hour shift. When do we have the time to wait in queues to get milk powder? We [construction workers] don’t live with our families, we live in dorms. Even when you have money to buy it, there is no milk powder. I guess in a way it is a saving, but I do miss a good cup of tea,” Marasinghe stated. This same impact has been felt by small business owners who have opted to remove milk-related products from their menus, while supermarket chains have received limited supplies of milk powder. “My sister and I run a small food outlet by the main road. A warm cup of tea is something we have always served along with short-eats. Everyone likes a good cup of tea. We cater to many truck, bus, and three-wheeler drivers. Finding milk powder now is a big problem and we had to stop selling milk tea in November. Most drivers and commuters ask for a cup of milk tea in the morning or the afternoon. Our sales are down due to this. There is milk powder in some places, but they charge us so much for each packet, it’s not worth buying them anymore,” Kavanthi Dissanayake, who runs a small canteen in Mulleriyawa, said. Retail outlets are also struggling to source milk powder to meet the demand, according to Tissa, a management officer at a supermarket chain in Gothatuwa. “We only get about 100-200 packets of milk powder per week now, so we are instructed to only sell one packet per customer. This is hard for us to do as people ask for more than one. It is heartbreaking to say no to a mother accompanied by a child when they ask for a second packet. We no longer stock milk powder on the shelves. But I keep a box under the cashier point and have instructed the staff to issue one per customer. There aren’t enough packets to meet the demand,” said Tissa. Government response When questioned about this issue, Trade Ministry Secretary Bhadranee Jayawardane pointed out that while there was a shortage in milk powder, there was no shortage in liquid milk. She explained that while the local production of milk powder was insufficient to meet the demand, the local production of liquid milk could be a substitute. “People have just got used to using milk powder in their daily lives. But we still have a good domestic production of the liquid milk that can be used as a substitute,” said Jayawardane.