Consumers yet to get benefit from duty cut on powdered milk
Saturday, 10 July 2010
Jasim Uddin Haroon
Powdered milk remains dearer in the local market despite tariff reduction by the government and its stable prices in the international market.
The government reduced import duty by 7.0 percentage points to 5.0 per cent effective from July 1 to stabilise prices of powdered milk in the local market.
Sources said importers have been supplying this essential commodity to their dealers at previous rates forcing the consumers to purchase full cream powdered milk at prices between Tk 400 and Tk 470 a kilogramme (kg).
However, some leading market players hinted that the consumers would get benefit of the policy support after end of their present inventory of the powdered milk.
"We've large inventory. Our new imports will cost less and there will be an impact of the reduction of the tariffs," said Ahmed Kabir, country manager of Arla Foods, supplier of popular Dano brand.
Importers said that prices of powdered milk in the international market remained stable over past few months.
"The global market is stable now with the prices ranging between US$ 3600 and $3700 a tonne as weather is favourable in the milk producing countries this year," said an importer.
Only a local company -- Meghna Group of Industries -- has decided to reduce prices of powdered milk.
Mostafa Kamal, managing director of Meghna Group, told the FE that it had decided to cut prices by Tk 24 a kg.
"The government has reduced tariff and we have cut the prices in the light of the duty cut," Mostafa, who supplies powdered milk under the brand of Fresh.
Analysts say that the government should monitor the prices of the powdered milk.
Uttam Dev, an analyst of local think tank -- CPD -- said that there is a need for strong government monitoring. "We have supported this budgetary measure as it might help stabilise the prices of the essential item in the local market. But, in fact, there is no impact," he added.
Bangladesh imports around 13000 tonnes of powdered milk a year mainly from East European countries, Australia, New Zealand and China.
Abul Khair Group, which supplies 'Marks', is the market leader of the powdered milk.
Powdered milk remains dearer in the local market despite tariff reduction by the government and its stable prices in the international market.
The government reduced import duty by 7.0 percentage points to 5.0 per cent effective from July 1 to stabilise prices of powdered milk in the local market.
Sources said importers have been supplying this essential commodity to their dealers at previous rates forcing the consumers to purchase full cream powdered milk at prices between Tk 400 and Tk 470 a kilogramme (kg).
However, some leading market players hinted that the consumers would get benefit of the policy support after end of their present inventory of the powdered milk.
"We've large inventory. Our new imports will cost less and there will be an impact of the reduction of the tariffs," said Ahmed Kabir, country manager of Arla Foods, supplier of popular Dano brand.
Importers said that prices of powdered milk in the international market remained stable over past few months.
"The global market is stable now with the prices ranging between US$ 3600 and $3700 a tonne as weather is favourable in the milk producing countries this year," said an importer.
Only a local company -- Meghna Group of Industries -- has decided to reduce prices of powdered milk.
Mostafa Kamal, managing director of Meghna Group, told the FE that it had decided to cut prices by Tk 24 a kg.
"The government has reduced tariff and we have cut the prices in the light of the duty cut," Mostafa, who supplies powdered milk under the brand of Fresh.
Analysts say that the government should monitor the prices of the powdered milk.
Uttam Dev, an analyst of local think tank -- CPD -- said that there is a need for strong government monitoring. "We have supported this budgetary measure as it might help stabilise the prices of the essential item in the local market. But, in fact, there is no impact," he added.
Bangladesh imports around 13000 tonnes of powdered milk a year mainly from East European countries, Australia, New Zealand and China.
Abul Khair Group, which supplies 'Marks', is the market leader of the powdered milk.