Another Milk powder, Gas price hike expected next month

By Shezna Shums and Nirmala Kannangara
Gas companies and milk powder importers have requested the Consumer Affairs Authority (CAA) for another price increase in domestic gas cylinder and milk food, the The Morning Leader learns.
Managing Director, Laugfs Holdings Limited, Thilak de Silva said yesterday that they have made the application seeking a price revision to the CAA on Monday based on the February and March world oil prices.
"We made the request to the CAA for an increase of Rs.80 per a cylinder considering the world oil prices during February and March. According to the pricing formula we have the authority to request for a price revision once in two months," De Silva added.
Meanwhile, Finance Director Shell Gas Company Rimoe Saldin too told The Morning Leader that they have made an application to the CAA for yet another price revision from the first week of May.
"As a rotation we have the right to request for a price revision in every two months according to the pricing formula. The last price hike was in March and the next would be from May but it is the CAA that has the power either to give permission or to refuse our request, considering the factual oil prices in the world market during February and March," Saldin further stated.
Milk powder importing companies have requested the CAA for a Rs. 20 increase for a 400 gram milk powder pack.
Currently a 400gram pack of milk powder is sold at Rs 275 and if the request is permitted by the CAA, a pack would increase up to Rs 295.
This is a joint request to the CAA by all milk importing companies in the country.
Director, Milk Division, Maliban Biscuit Manufacturing Ltd, Lakshman Weerasuriya told The Morning Leader that this request was made last week and that all milk importing companies are still awaiting a reply from the CAA as to how much they would be permitted to increase.
About 95 percent of the country’s milk demand is met by the milk powder imports,
Weerasuriya said that there was a worldwide shortage of milk, which was increasing the costs as well as creating a shortage in the market.
This shortage was created after some of the main milk producing countries experienced drought and the other factor was that many cows had to be killed following the scare of mad cow disease.
The other factors that have compounded the problems for the milk industry is that both China and India were developing at such a rate that their demand for food including milk powder has also increased causing a sever shortage in the world wide milk powder market.
Weerasuriya also said that every 30 years the world experiences the prices of most items increasing.
Explaining that when compared with last year the costs of a coconut, coconut oil, palm oil, flour, salt, tea and other foods are shooting up this year, and that this is the case all around the world.
To improve the local milk industry and make it profitable to expand, Weerasuriya said that the cost of a liter of milk has to be sold for at least Rs.100.
Annually Sri Lanka imports about 60,000 metric tons of milk powder and one metric ton costs about $ 5200.