Factors affecting Import Shares of Powdered Milk and other Milk Products and their Implications in Sri Lanka

Import shares of liquid milk, powdered milk, condensed milk and other milk products were estimated to determine their relative competitiveness. The change of import shares with changes of exchange rate and world price of milk. The analysis based on yearly data between 1975-2006 showed that relative CIF prices and incomes were important factors influencing the market shares of milk and milk products. The results also showed that imported milk powder is price inelastic and a weak substitute for other imported milk products. The milk powder import shares will decline marginally with depreciation of exchange rate by 5% and increase of world price of milk over a forecasted period of 5-7 years. However, these changes are not significant.

DOI: 10.4038/sjae.v8i0.1827

Sri Lankan Journal of Agricultural Economics, Vol. 8, 2006 pp.21-30