LAHORE - In sharp contrast to India, which is a net exporter of milk , Pakistan is facing shortage of milk supply, forcing the processing companies to import expensive milk powders to compensate for the less volume collected through dairy farms.
The dairy processing industry , biscuit, sweet and confectionery manufacturers, during 2014, had to import about 34 milling kgs of $117 million skimmed milk and whey powders at 17 per cent expensive rate of around $3,855 per ton as against local raw milk of Rs56.5 per liter.
The dairy processing industry has also been preferring imported skimmed milk due to several issues in local raw milk even supplied by the renowned commercial farmers, like positive antibiotic level, high aflatoxin levels, abnormal percentage and variation in fatty acid profile etc.
Dairy processing industry and manufacturers of milk-related products have observed through consumer testing that products made of imported powder are preferred over the ones made of local milk . It is a fact that the milk available in the local market is of lower quality and adulterated milk is supplied by most of the milk suppliers.
Quality of milk defines the perfection of tea creamer and imported SMP is far superior as compared to local milk procured. And if dairy processing companies produce their own powder from raw milk , it is not of the quality that is offered by imported powder due to impurities in the raw milk . Specialized products like infant milk , milk for young children etc. needs to be of highest quality and our local milk cannot provide that quality and we have to use imported milk powder for it. The imported powders not only offer the highest quality but also have stable specifications.
As the government, on the demand of some influential commercial milk suppliers, is considering to increase import duty on skimmed milk powder , Pakistan Dairy Association Chairman Faisal Imran Hussain Malik, in a letter written to Seerat Asghar, Federal Secretary, Ministry of National Food Security and Research, has pleaded that the sole purpose of importing powder milk is that the milk production in Pakistan cannot suffice the needs of the dairy processing companies.
“The fluctuation in the availability of milk caused by factors such as lean season, drought, floods, diseases etc. cause reduction in the volume of milk , forcing processing companies to import milk powders to fulfill their production requirements. If the local supply of milk is adequate, the import of these powders would decline significantly.”
According to experts, 20% duty is already imposed on import of skimmed milk and whey powder from member countries of the South Asian Association for Regional Cooperation (Saarc) and 25% duty is collected on imports from other countries.
If government further enhances duty on skimmed milk , the lose milk , which is presently available in provincial capital at average price of Rs65 per kg, against the official rate of Rs60 per kg, will become more scarce commodity as the total supply will be diverted to large multinational milk processing companies. Ultimately the general public will suffer the most.
Faisal Malik argued that that restriction on imports of skimmed milk will bring benefit for the dairy farmers is false. Increasing the duties would not increase the milk yield in Pakistan and would rather inflate the cost of the input for dairy processing industries.
“To offset that increase processing companies will be forced to either reduce the price of milk procurement or increase the price of final product. This would lead to food inflation that will go against the goals of sitting government.” CEO of Haleeb Foods said that dairy farmers should study the dairy farming industry of India and try to follow the best practices to be more efficient and cost effective. Currently these dairy farmers have themselves created shortage of milk to increase bargain power and demand higher rates.
Faisal Malik, in his letter, observed that comparing Pakistan with India is a lopsided biased comparison as India is a milk surplus country (hence it can impose higher import duties), dairy farmers of Pakistan sell milk at 35% higher prices as compared to India and that imposing higher import duties on milk powders would not help the dairy farmers but rather result in food inflation.
He said that India produces milk in surplus to its own consumption requirement; hence the excess is used for the production of dairy products that are then exported. Pakistan, on the contrary, has a shortage of milk and cannot suffice its own requirements. Milk price in India is at Indian Rupee 30-31 per liter (39-40 last year) for buffalo and Indian Rupees 18-19 per liter (26-27 last year) for cow. If converted to Pakistani Rupee, buffalo milk will cost PKR 48 per liter whereas commercial farmers like Nishat Diaries Limited are charging lucrative rates of above PKR 65 per liter. Milk prices in India have declined sharply as compared to last year, whereas, in Pakistan the milk prices increased instead, he claimed.
PDA Chairman and Haleeb Food CEO said that SMP imported by the renowned dairy industries is of the best quality. Every shipment is accompanied with the Certificate of Analysis, Material Specification Data Sheet,
Halal Certificates and other certificates awarding the powder to be fit for human consumption. Samples of the SMP shipments are audited by the PSQCA department at the Karachi port, he added.