Milk powder price formula on hold | Sunday Observer

Milk powder price formula on hold

The Cabinet has delayed approving a milk powder price formula by a week as decided on by the Cabinet at its last week’s meeting, the Sunday Observer reliably learns.

Following the continuous demand by milk powder importers to increase price of milk powder, the Cost of Living Committee (CLC) and the Industry and Commerce Ministry had submitted a new price formula for cabinet approval last week.

Head of the CLC and Development Strategies and International Trade Minister Malik Samarawickrama told the Sunday Observer that the CLC has approved the milk powder price formula and the final decision will be taken at the cabinet meeting soon.

A committee headed by Economic Reforms and Public Distribution Minister Dr. Harsha de Silva had discussions about the possibility of introducing a formula which would determine the milk powder prices in the local market in keeping with the world market price fluctuations. Representatives of the Finance Ministry and the Industry and Commerce Ministry also participated in the discussions.

“Initially, the committee led by Dr. Harsha de Silva discussed the formula. The CLC received the formula and approved it about two weeks ago,” Minister Samarawickrama said.

According to market sources, the milk powder price has increased in the global market to US$ 2,975 per ton from US$ 2,550 since May last year.

The Rupee has also depreciated against the US dollar nearly by 16 percent. Reportedly, this has created a monthly loss of Rs. 30 - 40 million to milk powder importers. A few months ago, they had demanded the government to increase milk powder prices by Rs. 100.

“Milk powder companies always complain about losses. Even if they make profits, they complain of losses,” said Consumer Affairs Authority Chairman and a member of the CLC, Rumy Marshook.

According to sources, the objection to the new price formula this week had been due to a negative response from the people who say that regulations are being made outside the budget.