Milk prices in city surge, outstrip Paris, Amsterdam

KARACHI:

Milk prices in Pakistan have surged by more than 20% following the imposition of a new tax, making the dairy staple more expensive in Karachi than in Paris, Melbourne, and Amsterdam.

Ultra-high temperature (UHT) milk now costs 370 rupees ($1.33) per litre in Karachi supermarkets, compared to $1.23 in Paris, $1.08 in Melbourne, and $1.29 in Amsterdam, according to Bloomberg data.

The 18% tax, part of recent taxation changes approved in the national budget, has significantly increased milk prices, which were previously tax-exempt.

Muhammad Nasir, a spokesman for the local unit of Dutch dairy producer Royal FrieslandCampina NV, stated that before the tax, milk prices in Pakistan were comparable to those in developing countries like Vietnam and Nigeria.

The new tax has caused retail prices to rise by as much as 25%.

The increased milk prices are expected to exacerbate inflation in Pakistan, where wages have stagnated and purchasing power is declining.

Last week's budget, which included a record 40% tax increase, aims to meet conditions set by the International Monetary Fund for a new bailout.