Lanka to export butter next year - Pelwatte Dairy chief

Pelwatte Dairy Industries will produce over 700 tonnes of butter a year and will begin exports next year, Chairman, Pelwatte Dairy Industries, Ariyaseela Wickramanayake said.

He said Sri Lanka imports around 700 tonnes of butter a year and added that with the increase in local production, imports could be stopped, saving foreign exchange for the country. The country spends a staggering amount of foreign exchange on the import of milk powder and butter from countries that have made Sri Lanka a dumping ground for their excess production.

“We have the capacity to produce butter more than the national need and hope to go in for exports soon. The excess quantity can be exported and also used as in the barter system to exchange butter for oil with Iran and thereby save foreign exchange,” Wickramanayake said.

“The expenditure on milk powder imports which was around US$ 400 million a year has been slashed to around US$ 200 million. We can be self-sufficient in milk by next year and this money could be used for development projects,” he said.

Sri Lanka has been importing around 7,500 tonnes of milk powder a year. Since January this year imports have been slashed to around 3,500 tonnes.

Wickramanayake said with the re-imposition of the import tax, milk powder imports could be further slashed to around 1,000 tonnes a year. Policymakers should take drastic measures to stop imports of cheap milk powder and boost local production as done in many countries,” he said.

Large milk producing countries export excess quantities at a low prices extracting fat and substituting it with additives which are harmful to health. India has imposed a huge tax on milk powder imports and China has taken stern measures to stop imports.

“Sri Lanka could be self-sufficient in milk next year provided that a tax is imposed on imports. The money used on imports could be used to pay the debt of many mega infrastructure projects such as the Mattala Airport and many others,” Wickramanayake said.

Fat constitutes around three to four percent of the solid content, protein around 3.5 percent and lactose five percent in cow milk. The chemical composition varies depending on the breed. Germany, France, Belgium, Australia, New Zealand, UK, Poland and Denmark are some of the top milk exporting countries. There are over six billion consumers of milk and milk products across the world and around 750 million people live within dairy farming households. Pelwatte produces around 200,000 litres of milk a day and supports a large number of farmer families. Of around 1.2 million cows in the country only one-third is being milked. Imported milk is found in Jaffna despite having around 250,000 cows.

Sri Lanka is self-sufficient in most animal products apart from dairy. However, the consumption of dairy products has increased dramatically since the 1970s when the then government adopted open economic policies.

The dairy industry has the potential to make a substantial contribution to economic development and it plays a vital role in alleviating nutritional poverty and increasing rural household income.

The Government’s target is to increase milk production to around 50 percent this year. This is a challenging task, given the current state of the industry, which only supplies approximately 20 percent of the domestic needs.

This is in sharp contrast with the situation two decades before the opening of the economy in 1977, where domestic sources provided nearly 80 percent of Sri Lanka’s needs. Industry experts said given the current levels of malnutrition, particularly among pre-schoolchildren and pregnant mothers, milk production is important to improve the situation.

The State-owned dairy firm, Milco has geared operations to meet the country’s long-term goal of self-sufficiency. A senior official of the company said Milco produces around 205,592 litres of milk a day of which around 110,000 litres is used to produce milk powder.

The rest is used to manufacture pasteurized milk, UHT milk, yoghurt, ice cream and other products. Milk production has increased by 22,322 litres a day from 183,270 litres last year. The annual growth rate is between 5-10 percent. Around 45,500 farmer families benefit from the dairy business.

“Milco will expand its milk collection network by, setting up 300 farmer societies which could produce around 40,200 litres of milk per day, collecting evening milk up to 11,000 litres per day and provide 200 bull calves among dairy farmers. We will export once the local market is flooded with our products,” he said.

- LF