August dairy imports slump 40% as local production gathers steam

Dairy product imports fell the most in August indicating that local milk production is gathering steam amid fresh government initiatives to further strengthen the sector to achieve self-sufficiency in the country’s dairy requirement. 

Sri Lanka spent US$ 23 million for importing dairy products during August, a decline of 39.4 percent from of US$ 38 million a year earlier.

This fall in dairy product imports became the single most prominent factor to pull down the total value spent on food and beverage imports in August. 

Sri Lanka spent US$ 106.1 million in August on food and beverage imports, down by US$ 11.8 million or 10 percent from a year ago as the country saved US$ 15 million from dairy imports that month.

Sri Lanka annually spends around US$ 312 million or Rs.55 billion on dairy product imports to meet 60 percent of the domestic requirement.

This is about 85 million kilograms of milk cream fat. 

With the August slump, the cumulative amount spent on dairy product imports during the first eight months was US$ 228.9 million compared to US$ 16.1 million spent during the same period last year, an increase of 5.9 percent. 

In September, President Gotabaya Rajapaksa instructed officials to devise both short and long-term plans to enhance the local liquid milk production with an aim to meet the local requirement within the next decade, as part of the government’s broader efforts to improve incomes of those driving the rural economy. 

The new government established a State Ministry of Livestock Farm Promotion and Dairy and Egg Related Industries identifying this sector’s economic and social significance. 

Small-scale dairy farmers account for 85 percent of the current local liquid milk production and instructions were issued to improve grass cultivation, dairy cow breeding and research activities, and cattle feed supply, including supplying grass at concessionary rates to farmers to boost production and thereby their incomes. 

There is significant increase in demand for liquid milk in Sri Lanka with the increasing incomes and consumers being more health conscious amid controversies surrounding milk powder. 

However, prices remain beyond reach for many, depriving them of the opportunity to consume nutritious fresh liquid milk. 

Local production currently meets only less than 40 percent of the annual liquid milk requirement.