Small traders express concern over heavy taxation on dairy industry

ISLAMABAD: The Islamabad Chamber of Small Traders on Sunday expressed serious concern over heavy taxation on local dairy industry and imported milk, which has resulted in hike in the price of packed milk twice in a short span.

It asked the government to review the taxes and take note of the situation as it will hit health of masses, especially babies, half of whom are already underfed.Talking to Tabassum Anwar, Chairperson of IWCCI Standing Committee on Trade and Industry, he said that prices of sugar have also been increased, which is unjustified.

He said the government has imposed 20 percent customs duty and 25 percent regulatory duty on import of milk powder to please the elite class, keeping in view the upcoming elections. Shahid Rasheed Butt said the decision was unacceptable as masses should not pay the cost of ambitions of the political elite.

He said the EU has given trade relaxations to Pakistan while our policymakers have returned the favour by imposing additional taxes on their exports, which may compel them to change their mind and that will further damage dwindling exports.

Additional taxes have also pushed the local dairy sector into a crisis, which has increased the cost of doing business. He noted that the revenue measures will result in around 30 percent fall in the demand of milk hitting masses and the people linked to this business.

Pakistan is the third largest milk producer in the world producing around 55 million tonnes of milk, production is increasing by four percent per year while the demand is increasing 15 percent annually.

Pakistan exports skimmed and fresh milk while it also imports 40,000 tonnes of milk, mainly from India, which is equal to 320,000 tonnes of fresh milk, he informed.The global milk demand is set to increase by 36 percent in nine years, which can be an opportunity for Pakistan.

Resource: https://www.thenews.com.pk/print/139197-Small-traders-express-concern-over-heavy-taxation-on-dairy-industry

European Union dairy intervention boosts unviable

THE EU paying dairy farmers to slow milk production will be good for global markets in the short term, according to Dairy Australia analyst John ­Droppert.

But the downside was that it might keep unviable dairy farmers in business in the ­medium term, Mr Droppert said.

The EU Commission’s €500 million ($A740 million) package to support dairy farmers announced last month ­includes €150 million ($A221 million) to ­encourage milk production cuts across three months. EU nations have swamped the globe with milk, adding to the oversupply that has ­depressed global prices.

Milk production has started to slow, but the most recent UK Agriculture and Horticulture Development Board figures from May showed a lift of 0.8 per cent in milk deliveries across the EU compared with the same month last year.

“Milk production was ­already starting to slow down, handing out money at this point, I think the effect will be fairly limited,” Mr Droppert said.

There’s a feeling in the wind that we are starting to see an improvement, anything to help slow down (production) in the short term will help.

“But handing money to marginal producers to keep them viable into the future may not be such a good thing in the medium term.”

In the past month global prices have shown a small ­improvement, fat products, such as butter, have increased $US150-$US200 ($A195-$260) a tonne, while milk powder has remained stable and skim milk powder lifted up to $US100 a tonne, according to Mr ­Droppert.

Near-term pricing on Global Dairy Trade has improved recently, but Mr Droppert said there had been tightening of the market in later contracts as well.

“It is not so much that they are going up, but a feeling that they are not going down as we head towards the slow and steady recovery,” he said.

Acting Australian Dairy Farmers president David Basham said the EU intervention “might slow down milk production quickly, but it might be keeping people in business in the EU ... longer than they would have”.

Mr Basham welcomed the move to cut supply in a bid to help prices but said the EU’s regular market intervention put uncertainty in the market and prompted speculators to enter into the market.

Resource: http://www.weeklytimesnow.com.au/agribusiness/dairy/european-union-dairy-intervention-boosts-unviable/news-story/1cf57f7083ba62cc1297f0002c1146b5