Importers of milk powders demand withdrawal of duties to ease prices
Tuesday, 9 October 2007
Naim-Ul-Karim
The government of late has started thinking of ways and means to rein in prices of the milk powder and baby food items that skyrocketed and are going beyond the buying capacity of consumers, sources said.
They said the Ministry of Commerce last week held a meeting with all concerned stakeholders including importers and producers of full cream and skimmed milk powders to discuss market situation at home and abroad to curb the prices of those items.
During the meeting the importers and producers said that milk should not be considered as a luxury item but as essential for daily health and nutrition for children and adults as well, and urged the government to completely withdraw customs duty (CD) at import stage and supplementary duty (SD) at production stage on milk powder and both CD and SD on infant formula which would partially offset the impact of the very high global prices.
Sources said the Ministry of Commerce was expected to sit with authorities concerned of the government to discuss the proposals soon after return of its secretary, Feroz Ahmed, from Nepal.
"The meeting is likely to consider the proposals positively," an official source said.
When asked, he said it was observed that basically three major reasons -- worst drought in a century in Australia, slowdown in milk production in Europe and USA over last few years due to reduction in subsidies and also shift of production towards corn and other grains for the increased demand for biofuel and higher demand for milk and milk based products in developing world led by countries like China and India where per capita income is rising rapidly -- pushed milk prices to an unprecedented level.
Source said the Commerce Ministry's meeting with producers and importers also observed that globally milk powder prices have started rising from last quarter of 2006 and in the last nine moths the prices have almost doubled with no signs of slowing down.
The meeting was informed that a structural change was taking place in milk prices and it would never come back to the levels of 2005-06. As per tile latest forecasts, the prices would remain very strong in 2008 and it might have marginal slowdown in 2009.
In view of such all-unprecedented situation in the global milk market, sources said, the meeting asked one of the market leaders of milk powder in the country to send a formal proposal for consideration, sources said.
They said managing director of Nestle Bangladesh Ltd Carlo Cifiello had already sent a proposal to the Commerce Secretary on October 4 urging for complete withdrawal CD and SD.
Sources said that Carlo wrote in his letter: "local prices of milk powder and infant formula will also go up substantially despite our sincere attempts to offset this abnormal increase in prices through cost savings from all other areas."
The government of late has started thinking of ways and means to rein in prices of the milk powder and baby food items that skyrocketed and are going beyond the buying capacity of consumers, sources said.
They said the Ministry of Commerce last week held a meeting with all concerned stakeholders including importers and producers of full cream and skimmed milk powders to discuss market situation at home and abroad to curb the prices of those items.
During the meeting the importers and producers said that milk should not be considered as a luxury item but as essential for daily health and nutrition for children and adults as well, and urged the government to completely withdraw customs duty (CD) at import stage and supplementary duty (SD) at production stage on milk powder and both CD and SD on infant formula which would partially offset the impact of the very high global prices.
Sources said the Ministry of Commerce was expected to sit with authorities concerned of the government to discuss the proposals soon after return of its secretary, Feroz Ahmed, from Nepal.
"The meeting is likely to consider the proposals positively," an official source said.
When asked, he said it was observed that basically three major reasons -- worst drought in a century in Australia, slowdown in milk production in Europe and USA over last few years due to reduction in subsidies and also shift of production towards corn and other grains for the increased demand for biofuel and higher demand for milk and milk based products in developing world led by countries like China and India where per capita income is rising rapidly -- pushed milk prices to an unprecedented level.
Source said the Commerce Ministry's meeting with producers and importers also observed that globally milk powder prices have started rising from last quarter of 2006 and in the last nine moths the prices have almost doubled with no signs of slowing down.
The meeting was informed that a structural change was taking place in milk prices and it would never come back to the levels of 2005-06. As per tile latest forecasts, the prices would remain very strong in 2008 and it might have marginal slowdown in 2009.
In view of such all-unprecedented situation in the global milk market, sources said, the meeting asked one of the market leaders of milk powder in the country to send a formal proposal for consideration, sources said.
They said managing director of Nestle Bangladesh Ltd Carlo Cifiello had already sent a proposal to the Commerce Secretary on October 4 urging for complete withdrawal CD and SD.
Sources said that Carlo wrote in his letter: "local prices of milk powder and infant formula will also go up substantially despite our sincere attempts to offset this abnormal increase in prices through cost savings from all other areas."