Importers refused a request by minister Harsha de Silva last Tuesday to get their stocks cleared at the port.
Claiming a total tax of Rs. 170 they have to pay per kilo, they say that they incur a loss of Rs. 110 as a result of the depreciation of the rupee and an increase in world market prices.
Claims of taxes too high
They call for either a price increase or a tax reduction.
Sri Lanka spends around 450 million US dollars on annual milk powder imports, which is around 85 per cent of the requirement.
The country needs 8,000 metric tons of milk powder every month.
There are two foreign companies and eight local companies involved in the imports.
The imports are taxed, purportedly to safeguard the interests of local milk producers.
However, economists say these taxes are purely meant to raise state revenue.
Quality of the milk powder?
Chiarman of Pelwatte Milk Company Ariyaseela Wickramanayake says that according to the internet, the milk powder is produced with the lactose imported from the US and the palm oil bought from Malaysia.
He challenges importer to prove that what they actually import is milk powder.
Quoting the government, he says the country has 1.3 million milch cows, but that milk is obtained from 250,000 of them only.