Lankan dairy industry hit by supply chain issues as forex crisis deepens – Reuters

  • AIDA calls for immediate action to prioritize the import of raw materials
  • Says industry is already struggling to support itself and meet demand for fresh and powdered milk
  • The impact of the Forex crisis felt by multiple facets of the industry

As the prevailing foreign exchange crisis in Sri Lanka has severely affected the country’s dairy industry, the All Island Dairy Association (AIDA) yesterday called for immediate action to prioritize the import of raw materials in order to help support the future of the industry.

Rising costs, scarcity of animal feed, vitamins, fuel and fertilizers, and the difficulty of importing maize have had a huge impact on the survival of the industry, according to an AIDA statement. .

“Appropriate micronutrients and vitamins from quality foods are an essential part of our industry, as animals play a critical role in the supply chain. It is imperative that feeds such as corn and silage are readily available as this would go a long way in sustaining the industry. However, the import dependency of these products and the import restrictions imposed due to the forex crisis are crippling the industry,” said AIDA Chairman Binesh Pananwala.

The lack of quality animal feed has greatly disrupted the supply chain of the dairy industry. AIDA pointed out that if cattle do not receive essential micronutrients and vitamins from maize and silage, the physical well-being of the animal is affected, thus affecting milk production.

Veterinary professionals have continually expressed growing concern for the welfare of these animals due to the shortage of food and medications such as antibiotics and anesthetics required for operations.

“The impact of the forex crisis is being felt in multiple facets of our industry. The industry is already struggling to support itself and due to lack of fuel, storage facilities, fertilizer and animal feed, we are unable to meet the demand for fresh milk and milk powder. Our production has already decreased a lot and if it is not corrected, it will be catastrophic in the future,” said AIDA Consultant and Managing Director ACH Munaweera.

The government granted permits for the import of maize on a case-by-case basis; however, fodder importers and dairy companies have struggled to maintain imports due to the shortage of foreign exchange. The shortage of foreign currency makes it difficult for banks to honor Letters of Credit (LC) for importers to bring in the raw materials needed to sustain the industry.

Nishantha Jayasooriya, outgoing president of AIDA, also shared his thoughts on the crisis. “The entire industry has felt the huge impact of the forex crisis. Breeders, producers, input suppliers and distributors have all been affected by rising costs and lack of resources. If conscious decisions and changes in fiscal and supervisory policy are not made, the industry will suffer even more as it will not be able to meet the demand for fresh milk and powdered milk.

Local milk production drops drastically due to the lack of quality food, and the supply of imported milk decreases due to rising prices. Currently, locally made feed is used to maintain livestock. However, due to lack of fertilizers and various other concerns, the feed supply is dwindling.

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