A liter of milk sees 87 percent price hike in less than a month
A sudden inspection by authorities leads to a spike in price of dairy products, destabilizing the economy that has been under stress due to an escalating inflation haunting the second most populous African country.
Led by the Ministry of Trade & Regional Integration, the inspection led to the closure of some dairy companies, after they were found distributing milk products below the recommended volume of nutrients.
There were some factories caught while mixing milk with water to increase their output, officials told The Reporter.
Even though the factories were opened later on, upon reaching an agreement to improve the quality of their products, the move caused a shortage since last week. Shops selling dairy products had empty stocks during the holiday, a time when demand usually goes up.
“The factories are now given a six month period to improve their standards and upgrade the quality of their products,” said Tariku Teka, a coordinator at the Livestock Development Institute.
Following the disruption in supply caused by the temporary closure of factories, prices increased significantly. A liter of milk costs between 50 and 60 birr, portraying an 87 percent surge from last month’s price. This comes on top of mounting costs of living in the country, where the inflation rate reached 34.7 percent during March 2022.
Production of milk in Ethiopia is far below the demand in the country, where there are 17 active dairy companies, which produce 400,000 liters of milk daily. The last decade also saw the closure of 30 producers due to a shortage of inputs, lack of finance and dearth in forex supply, among others.
There is a growing concern over quality of dairy products sold in the local market.
The Oromia Regional State is drafting a new directive with stringent measures against producers that sell subpar products.
“We are now training inspectors. Once the directive is approved, we will start taking samples and place stringent rules against those selling products that are below the standard,” said Hagere Mekonnen, a researcher at Oromia Agriculture Bureau.