Global price hike triggers powdered milk price to soar

Prices of yet another essential food item –  powdered milk –  have shot up, adding to the growing list of daily commodities that saw price increase in recent months. The rate per kilogram of powdered milk, which is an import-dependent essential in the local market, went up by Tk20-40 compared to the prices two weeks ago.

Escalation of powdered milk prices in the local market was triggered by the recent hike in the global market, say traders.

Also known as skimmed milk, currently, the selling prices of the item ranges between Tk690 to 925 across leading brands, from what used to be Tk650 to Tk900.

Prices of 1kg powdered milk, under the brand names of Nido, Dano, Marks, Diploma and Diplomilk are now respectively Tk925, Tk740, Tk690, Tk690 and Tk710.

Prices of 500g, which ranged from Tk320-370, increased by Tk10-Tk30, while prices of 400g, 200g and 100g packets rose by Tk10-20 across the brands.

"It is becoming increasingly difficult to make a living with the rising price of all commodities including oil, sugar and flour. Yesterday I found the price of 500g milk has increased by Tk30," said Fahmida Sultana, a resident of Chattogram's Jamalkhan.

Abdullah Al Noman, owner of Jibon Grocery at the Kazir Deuri CDA Market, said that in the last two weeks, each company increased the price of powdered milk and we are also forced to sell milk at higher prices."

Regarding the price hike, Maqbool Ahmed, GM sales of Sanwara Group (Diplomilk) said the country's powdered milk market is dependent on imports. The price of powdered milk has increased in the international market leading to increased sales rates in the domestic market.

Mujibul Islam, managing director of the group, said the price of powdered milk in the international market has risen nearly $900 per tonne in the last two months. At the same time, the cost of shipping and accessories for milk imports has almost doubled.

"All these contributed to the soaring price," he said, adding that prices are likely to increase further in the local market as the prices are still below the mark to match the proportion of the global price hike.

According to data from globaltrade.info, prices shot up twice in January and February in the global market -- from $3,886 to $4,757 (per tonne), which is a rise of $871.

Mosharraf Hossain Mintu, managing director of MH Group, a milk importer, said the reason for the rise in prices in the international market was the blow the dairy sector has suffered in the last two years of the coronavirus pandemic.

"During the pandemic-induced lockdown phases, many farm owners could not provide adequate feed to the cows. The food crisis also led many entrepreneurs to slaughter cows and sell them as meat," he said and added that the fallout of that crisis is still not over and as a result, there is a crisis of milk in the international market at present.

Two types of milk, skimmed and full cream, are imported for the local market. The full cream makes it to the market in two ways. One, the agents or dealers of international companies directly import the item into the local market and the other way is through the utilisation of the baggage rule -- where air passengers bring the product in their luggage. The full cream powder milk is used as a direct food product including milk tea. On the other hand, imported skimmed milk powder is widely used in sweets, ice cream and bakery products.