Powdered milk prices rise by Tk 50-110 per kg in one month

The prices of powdered milk have increased again by Tk 50 to Tk 110 per kilogramme (kg) in the last one month for rising prices in the international market, shortage of US dollars owing to depleting foreign currency reserves and complexities in opening letters of credit. 

According to retailers in the two big cities of Dhaka and Chattogram, the price of packets of powdered milk being sold under different brand names increased last month.

The development comes at a time when people are already in a crisis due to price hikes of most of essential commodities, food, fast-moving consumer goods and other items.

In the last two weeks, the prices of flour and lentils have increased in the market. The price of rice has not come down, but the prices of chicken and eggs have fallen although it is still much higher than usual.

Data of the Trading Corporation of Bangladesh showed that the prices of powdered milk of different brands have risen by 25 per cent to 40 per cent in the local market in the last one year.

The price has increased in the local market due to an abnormal price hike in the international market, fall in the value of the taka against the dollar, increase in transportation costs and difficulties in opening letters of credit, said SM Mujibur Rahman, head of accounts of the Meghna Group of Industries.

At the beginning of this year, the price of powdered milk per tonne in the international market was $3,400 to $4,000. Now, it increased to about $6,000, he said.

Bangladesh is facing a shortage of US dollars owing to the depletion of its foreign currency reserves, caused by escalating import bills against a decrease in exports and inflow of remittance.

The pricing is dependent on multiple factors, both external and internal, said the Arla Foods Bangladesh in an email statement.

"It is generally affected by, but not limited to increasing global milk price, increasing logistics and operational costs, as well as cost of goods and utility expenses, unpredictable exchange rates of United States dollar etc," said the company.

"We are always diligent to ensure nutrition and dairy goodness for our customers at the best possible price," it added.

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

A senior official of one of the country's leading companies involved in the business of importing and supplying powdered milk, on condition of anonymity, said shipping and packaging costs have increased by 30 per cent in the last 11 months.

He said the cost of production increased by 30 per cent due to the rising dollar while energy costs increased by 37 per cent due to an increase in diesel prices.

This is why the powdered milk market in the country is so volatile. "I don't see any signs of normalcy anytime soon," he added.

Mohammad Shahnewaz, a retailer at Karwan Bazar, one of the largest kitchen markets in Dhaka, said the price of powdered milk went up in the past month.

He said in the last five months, the price of powdered milk of different brands has increased three times. Dealers say prices will rise further. Human suffering will not be mitigated soon, he said.

According to the Custom House, Chattogram, about 38,100 tonnes of powdered milk worth Tk 1,232.16 crore were imported in the five months up till November 19 of the ongoing fiscal year.

About 42,513 tonnes of powdered milk worth Tk 1,185.23 crore were imported during the same period in fiscal 2021-22.