Tuesday, June 18, 2024

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Sri Lanka’s dairy industry grapples to survive in current  forex crisis

Sri Lanka’s dairy industry is  grappling to survive owing to the present foreign exchange crisis along with  rising costs, scarcity of feed, vitamins, fuel and fertilizer, and the difficulty in importation of maize.

 These shortcomings resulted in  a complete destabilization of the industry not only diminishing  supply of milk but  also mass unemployment as well,

The All Island Dairy Association (AIDA) has called on the government authorities to devise  integrated strategies to revitalize the  dairy industry and introduce  a cohesive and sustainable Dairy Development Plan for Sri Lanka.

Many dairy plants will be compelled to stop production altogether unless they are able to import spare parts within the next few weeks. If urgent steps are not taken to remedy the situation, the entire dairy industry will come to a halt.”

Binesh Pananwala, President of AIDA, noted that the dairy industry is in dire need of revival, as its deterioration will have a great impact on a plethora of industries and consumers alike. It is imperative that those measures are put in place to prioritize imports of raw materials for feed, which would lead to high levels of production and sustainability.

Mr Pananwalasaid that  it is imperative that feed such as maize and silage is readily available as it would greatly assist in sustaining the industry. However, the dependency on importing these commodities, and the restrictions placed on imports due to the forex crisis is crippling the industry.”

Veterinary professionals have continuously expressed their growing concern for the wellbeing of these animals due to the shortage of feed and medicines such as antibiotics and anaesthetics required for operations.

Mr. A.C.H Munaweera, Consultant and General Manager of AIDA,  discloaed that the Government of Sri Lanka has provided permits for the importation of maize on a case-by-case basis; however, fodder importers and dairy companies have struggled to sustain imports due to the forex shortage. 

The shortage of foreign exchange makes it difficult for banks to honour Letters of Credit (LCs) for importers to bring in the necessary raw materials needed to sustain the industry.

Mr. Nishantha Jayasooriya, immediate Past President of AIDA, also shared his thoughts on the crisis. “The entire industry has felt the tremendous impact of the forex crisis. 

The livestock farmers, producers, input suppliers and distributors alike have all been affected by rising costs and lack of resources. 

If conscious decisions and changes to fiscal and monitory policy are not made, the industry will suffer even further as it will be unable to meet the demand for both fresh milk and milk powder.”

The local production of milk is drastically falling due to the lack of quality feed, and the supply of imported milk is reducing due to the rising prices.

Currently, locally manufactured feed is used to maintain the livestock, however, due to the lack of fertilizers and various other concerns, the supply of feed is diminishing. As a result of this, the dairy industry will struggle further to meet the demand for both powdered and fresh milk going forward.

If the feed does not meet the required nutritional standard, the consequences would be severe as it would affect the health of approximately 900,000 animals.

Mr. Gamini Rajapaksha, Treasurer of AIDA, also commented. “Processing and value addition are integral and vital parts of the dairy industry. Dearth of foreign exchange and consequential scarcity of fuel, electricity etc. have adversely affected the processors. 

Some of the leading dairies are unable to operate their plants due to the lack of power, which forces them to reject the milk from the farmers. This has directly affected the livelihood of rural dairy farmer.

 Chilling tanks at milk collection centres cannot be operated, causing large volumes of milk to be discarded. Another aspect is the importation of equipment and spare parts for the dairy processing plants. 

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