Welcome to Business Outlook
Related Articles
Powdered milk imports are spiralling on the back of increased demand from a section of consumers on health concerns related to locally produced liquid milk and higher use by sweetmeat, confectionery and ice cream makers, said industry operators yesterday.
In the first five months of the year, milk and cream imports rose 23 percent year-on-year to 75,881 tonnes, according to data from the Bangladesh Bureau of Statistics (BBS).
The BBS data reveals that import growth of milk and cream in 2018 was 19 percent.
Milk consumption is increasing as people’s disposable income is on the rise on the back of steady growth of the economy, said a senior official of consumer goods division of Abul Khair Group, which sells the Marks brand powdered milk.
Imports are rising at a time when the domestic dairy industry is struggling amid the health safety concerns created for presence of antibiotics and heavy metal lead in some samples of pasteurised and raw milk above the acceptable limit.
Milk processors said the demand for liquid milk dropped in the last two weeks as a section of consumers stopped consuming it altogether fearing the health risks.
However, the demand for powdered milk has not increased, according to the official of the Abul Khair Group.
“Rather, a panic has been created,” he said seeking to remain unnamed.
However, Sabbir Hasan Nasir, executive director at ACI Logistics, which operates the country’s biggest supermarket chain Shwapno, said the demand for powdered milk has grown 24 percent following the release of the test results by Dhaka University researchers on June 25.
During the period, the demand for liquid milk fell 37 percent, he added.
Bangladesh, which imported less than 100,000 tonnes of milk and cream five years ago, bought 138,000 tonnes in 2018, spending more than Tk 2,624 crore, according to BBS and Bangladesh Bank (BB) data.
In the first five months of 2019, powdered milk import bills edged up 13 percent year-on-year to Tk 1,287 crore, according to BB data.
“Consumption of milk is increasing both out of home and at home. Besides, with the rising affluence for economic growth, the demand for nutritious foods has increased,” said Asif Iqbal, deputy managing director for fast-moving consumer goods at Meghna Group of Industries (MGI), whose brands include Fresh and Super Pure.
The demand for powdered milk has increased in recent times.
“But it is not clear whether it is because of a section of consumers’ shift towards powdered milk from liquid milk as we usually see 15-20 percent spike in demand ahead of Eid,” he added. Eid-ul-Azha is set to be celebrated in less than a fortnight’s time.
The volume of import of relatively lower priced powdered milk is higher than the higher priced ones, said Shafiqul Islam Tushar, chief marketing officer of New Zealand Dairy Products, whose powdered milk portfolio includes Red Cow, Diploma, Farmland and Shape Up.
“The majority of the consumers want milk at cheaper prices. And the demand for powdered milk is increasing in the lower price segment and not in the premium segment,” he added.
The value chain of locally produced milk — which is from farm to processing to marketing — has not developed yet in the absence of support from the government, said Kamruzzman Kamal, director for marketing at Pran-RFL Group, which has a range of milk brands. Still, there are restrictions on importing the semen of improved breeds of cows, he added.
The demand for powdered milk is high as marketing campaigns by local processors are low, said Mohammad Imran Hossain, president of the Bangladesh Dairy Farmers Association.
“In contrast, the marketing campaigns by the powdered milk importers are extreme.”
The increased imports would affect dairy farmers who need protection and incentive to grow. “We are already facing an impact.”
Dairy farmers are given incentives in India.
“We get nothing like that,” he said.
(TDS)
