Business

Milk import figures manipulated, claims Pelwatte Dairy

– Claims Sri Lanka ready to meet demand locally

– Animal Production Dept. and Dairy Association say self-sufficiency far away

Founder Chairman of Pelwatte Dairy Industries Ariyaseela Wickramanayake dismissed the dairy import statistics of Sri Lanka, claiming that the numbers have been “grossly exaggerated”.

Speaking to The Sunday Morning Business, Wickramanayake said: “I don’t know who is doing it, but the import figures have certainly been manipulated.”

Pelwatte Dairy Industries Ltd. is one of the biggest two local producers of milk in Sri Lanka, along with Milco (Pvt.) Ltd., a state-run diary producer.

Wickramanayake questioned how, despite the gradual growth in local dairy industry output and its growth in market share, Sri Lanka’s milk powder imports have increased over the past few years.

According to the Central Bank of Sri Lanka’s (CBSL) Annual Report 2017, Sri Lanka imported Rs. 48 billion worth of milk and milk products, which was a jump from its 2016 and 2015 figures of Rs. 36 billion and Rs. 34 billion, respectively.

Wickramanayake rubbished the attribution of this increase in imports to the higher per capita consumption of milk and milk-related products or the growing population.

“The fertility rate and population have nothing to do with increased importation. Consider the number of cups of tea you and I drink; has it gone up? No.”

Furthermore, he claimed that local producers presently satisfy 75% of Sri Lanka’s national milk requirement of 700 million litres per year and are even capable of meeting 100% of the demand without the aid of imports.

According to Wickramanayake, at the moment, Sri Lanka has 1.3 million cows, from which only 240,000 cows are used for milking purposes, allowing the imports to be dumped in the country.

“Now, we have a shortfall of 200 million litres which is getting covered, but if we utilise our cows, we will meet the national demand and even export milk.”

Reports from the Agriculture and Environment Statistic Division of the Census and Statistics Department say that the local milk production was 471 million litres in 2018, up from 396 million the previous year.

“In the last three years we have come up from 400 million litres to 500 million litres in production. Every year, we are increasing annual production. And as such, importation should come down with the increase in these numbers.”

He added that such irrelevant importation of milk in the presence of a possible reliability on local production results in losses from Sri Lanka’s foreign exchange earnings and a weakening rupee.

However, Department of Animal Production and Health Director General Dr. N. Wedasinghe said that Sri Lanka was not equipped to meet the full local milk requirement yet.

“We cannot meet the local requirement overnight. In my point of view, it will take 10 years to meet the demand 100% locally, based on the assessment of current industry performance.”

He expressed opposition to the idea of a complete ban on milk imports, saying it would “create unwanted problems”.

He further noted that the cost of producing locally is high at Rs. 80-100 per litre.

The All Island Dairy Association Executive Committee member Asoka Bandara too echoed the views of Wedasinghe in saying that Sri Lanka was not ready to meet national demand locally.

“When you go through the Central Bank data, you will realise that it is far away. I do not think it is possible to supply 100% of the local milk powder requirement.”

However, he was more optimistic about meeting 50% of national demand, although that too would be in the distant future.

“Let’s have a realistic goal. Let’s say 50%. Today, the collection is about 460-480 million litres a year and out of that, a certain percentage goes to powder. So, if you increase this quantity every year – at least by 100 million litres – we need about years to supply 40-50% of the milk powder requirement.”

He acknowledged the loss of foreign exchange due to the high volume of imports, but claimed that a sudden suspension of imports would lead to a shortage.

“$ 300 million spent on milk imports is quiet a significant amount. As a country, we should work to reduce that, but we cannot do it by just stopping the import of milk powder. Then, there will be shortage.”

He said one of the main reasons Sri Lanka cannot meet the demand locally is the cows.
“It is the matter of the yield of the cows. With the Sri Lankan cow, the yield is very low. If you take the average yield of cattle from rural areas, they provide two to three litres of milk every day. I think what the Government has been trying to do is import some cows from Australia which give about 20 litres a day.”

President Maithripala Sirisena recently slammed multinational milk powder companies for importing substandard products to Sri Lanka and called for the local dairy industry to be developed to meet consumer needs.

However, Health Minister Dr. Rajitha Senaratne argued against these claims, denying any contamination, stating that all imported milk powder was subjected to stringent quality tests both in Sri Lanka and abroad.