JEDDAH: The price of powdered milk has risen by five to eight percent this month, coming on the back of a four percent increase at the beginning of April. With increases ranging between SR2 to SR4, the cost of 900 gram, 1,800 gram, and 2,500 gram cans are now SR37, SR58, and SR74, compared to the previous SR34, SR54, and SR70. Abdullah Bin Muhammad, a sales official at a powdered milk-importing company, said the price for a ton of the product has risen by about $170. “The price of a ton is now $3,500, from $3,336 during the first quarter of 2010,” he said, adding that he expects prices to rise by 10 percent soon, given the huge demand for baby milk. It is estimated that Saudis spend SR1.5 billion annually on this commodity. Consumption is around 80 million cans given the fact more than 600,000 babies are born every year, he said. He said trade policies in Western countries toward dairy products have contributed to the gradual hike in prices, noting that the price rose by 50 percent over the last five years. The European Union's scrapping of its dairy subsidies led to price hikes. In addition, many European producers have turned to producing butter instead of milk, he said. “Other factors raising the price are high oil prices, unrest in the Middle East and increases in the cost of insurance,” he added.
