Skimmed milk powder: Import duty likely to be increased in budget

Industry players seek heavy duty to avoid the flood of imports.

ISLAMABAD: The government is considering increasing import duty on skimmed milk powder and whey powder in a bid to shield the domestic dairy industry that is teetering on the brink of collapse due to a flood of imports.

The government started studying the proposal after dairy product manufacturers called for slapping a heavy import duty on skimmed milk and whey powder in the upcoming budget. They also cited the example of India and Turkey where high import duties were in place, say officials.

At present, only 20% duty is imposed on the 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.



This is the main reason, according to the industry, that the country is fast becoming a dumping ground for dry milk powder from around the world, badly hurting dairy farmers and milk production.

Industry players point out that India and Turkey have protected their dairy industry from the flood of imported dry milk. India has imposed 68% duty while Turkey has 180% duty in an effort to become a net exporter of dry milk.

The National Assembly Standing Committee on National Food Security and Research had also asked the government to collect 100% duty on the import of dry milk. Members of the committee were unanimous in their view that such imports should be discouraged as they were hitting the dairy farmers hard.

“Imports not only hit the interest of local producers, but are also a waste of foreign currency,” commented an industry source.

The increasing usage of skimmed milk and whey powder in the dairy processing industry, dairy-related products, biscuit, sweet and confectionery manufacturing, and production of tea whitening products has deprived the farmers of a fair price for fresh milk.

Though Pakistan was said to be the world’s third largest milk producer, it imported $341 million worth of skimmed milk and whey powder in three years from 2012 to 2014.

About 35 million kg of dry milk valuing $102.1 million was imported in 2012, about 22 million kg costing $70.7 million in 2013 and about 33.5 million kg valuing $117 million in 2014.

Dairy industry players say powerful lobbies in the Ministry of Finance and Federal Board of Revenue (FBR) have prevented the farmers from meeting Finance Minister Ishaq Dar to air their grievances and brief him how the uncontrolled dry milk import is hurting millions of farmers across the country.

Published in The Express Tribune, May 19^th,  2015.

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