Fresh blow for consumers as powdered milk prices rise

Powdered milk prices have increased by Tk 50 to Tk 80 per kilogramme (kg) as rising transportation charges and the growing value of US dollars pushed up costs in the international market.

According to retailers, the price of 1 kg packets of powdered milk under brand names such as Nido, Dano, Marks and Diploma rose from Tk 530 to Tk 560, Tk 680 to Tk 730, Tk 580 to Tk 660 and Tk 680 to Tk 740 respectively.

The development comes at a time when consumers are already suffering from high prices of edible oil, wheat, rice and sugar due to disruptions in the international supply chain caused by the Russia-Ukraine war while unfavourable weather conditions have battered the domestic front.

"The international market is volatile now due to the Russia-Ukraine war while rising production and transportation costs along with dollar prices are also to blame," said Mostafa Kamal, chairman and managing director of Meghna Group.

"As soon as the price of any basic product increases, it hits another sector and that is what happened to the cost of powdered milk," he added.

Galib Bin Mohammad, head of marketing at Arla Foods Bangladesh, said pricing is dependent on multiple factors, both external and internal.

"It can be affected by, but is not limited to, the increase of global milk prices, higher logistic costs, import duties and so on," he added.

Arla Foods Bangladesh, the local subsidiary of Danish multinational dairy cooperative Arla Foods, is the producer of powdered milk brand Dano.

Abdul Matin, a wholesaler at Karwan Bazar, one of the largest kitchen markets in Dhaka, said the price of powdered milk went up in the past month.

He went on to say that prices would go up further even though there is no shortage of milk in the local market.

In the current fiscal year, powdered milk imports increased 9 per cent while prices of the product increased by 12 per cent year-on-year.

According to the Custom House, Chattogram, about 101,153 tonnes of powdered milk worth Tk 2,594.4 crore was imported in the 10 months up till April of the ongoing fiscal year.

About 93,247 tonnes of powdered milk worth Tk 2,143.33 crore was imported during the same period in fiscal 2020-21.

Sibly Ahmed, a private job holder who lives in Dhaka's Agargaon area, said the rise in powdered milk prices has left middle-class people embarrassed about their spending capacities.

"I had to stop eating eggs in order to pay the extra price of my baby's milk," he added. Bashir Uddin, president of the Moulvibazar Traders Association, said the global price of powdered milk has risen considerably.

The price of one tonne of the product was about $2,500 two or three years ago but now, the same amount costs $7,000 to $9,000. "If the Russia-Ukraine war does not stop, the price will increase further and not only us, but the whole world will suffer," Uddin added.

Kamruzzman Kamal, director for marketing at Pran-RFL Group, said the price of powdered milk rose in international markets between October and April this year due to several reasons.

During the last auction in the international market in May, the price of powdered milk had come down by 2-3 per cent. Even after buying powdered milk at the upcoming auction, it will take another three to four months for the product to reach retail markets in Bangladesh.

"Only then will the price go down," Kamal said.

Processed milk prices rising

The price of processed milk is rising at the retail level in different areas of the capital as well due to the higher cost of feed and other inputs.

On average, half-litre packs of the dairy product are being sold for Tk 45 while a one-litre packet costs Tk 80, up by Tk 7 and Tk 10 respectively.

Aarong Dairy currently sells each litre of pasteurised milk at Tk 80 while it was Tk 70 previously. Likewise, the price of the company's half-litre packs rose to Tk 45 from Tk 38.

Pran Dairy, a concern of Pran-RFL Group, increased the price of its one-litre UHT milk packets to Tk 80 from Tk 70 while the half-litre packs of the product now cost Tk 45 instead of the previous Tk 40.