Powdered milk makers seek price hike OK

A group of powdered milk producers has requested the Ministry of Commerce’s authorization to raise the prices of their products ahead of Ramadan. One firm has already gone ahead and raised the price of a 1,800-gram pack by more than 10 percent, ahead of any such approval by the ministry.
Three proposals were submitted in this regard, with the aim of reaching a solution to the current “bottleneck” the companies are facing.
The first proposal suggests granting a custom’s waiver for imported powdered milk, while the second idea advocates providing a provisional subsidy that equals the increase in prices. Finally, the last proposal recommends allowing these firms to raise their prices pending the approval of a subsidy.
The request submitted to the Ministry of Commerce on behalf of the powdered milk producers included justifications for raising the prices, such as the inability of these firms to cope with a wave of high prices in the international markets.
Manufacturers of powdered milk said they suffer from the price increase witnessed in the global market due to the drought that hit New Zealand, and large parts of Australia, as well as the cold wave in Europe.
The factors, in addition to the high demand on powdered milk from China, contributed to the spikes in prices up to almost 100 percent.
Global prices of powdered milk increased in the first quarter of this year from $ 3,500 (SR 13,000) to $ 5,500 (SR 26,600) per ton.
Customs fees of the product amount to 5 percent and manufacturers demanded the body of jurisdiction to consider a provisional waiver in view that powdered milk is already a raw material, which will be subjected to several processes prior to the final product.
In this regard, they said that local products face fierce competition with imported final products that enter local markets, while they have to struggle with costs of production.
Meanwhile, importers of powdered milk say local firms raised their prices in line with the rise in global prices. However, they said that there are a number of merchants who took advantage of the current chaos in markets and raised the prices.
They have also called for competent bodies to supervise the market to ensure all parties concerned reach a fair and just solution to the predicament at hand.