Milk prices in Pakistan have surged by more than 20% following the imposition of a new tax, making this essential dairy product more expensive than in several developed nations, according to a report.
Ultra-high temperature (UHT) milk now costs Rs370 ($1.33) per liter in Karachi supermarkets, surpassing prices in cities such as Amsterdam ($1.29), Paris ($1.23), and Melbourne ($1.08).
The price hike is a result of an 18% tax applied to packaged milk as part of the taxation changes approved in Pakistan’s national budget last week. Packaged milk was previously tax-exempt, and the new tax has caused retail prices to rise by as much as 25%.
Prior to this increase, milk prices in Pakistan were comparable to those in developing countries like Vietnam and Nigeria, noted Muhammad Nasir, a spokesman for the local unit of Dutch dairy producer Royal FrieslandCampina NV. The higher cost of milk is expected to exacerbate inflation in Pakistan, where stagnant wages have already reduced purchasing power.
The rise in milk prices is also likely to have a detrimental impact on child health in Pakistan, where approximately 40% of the population lives in poverty. “It will deny nutrition from a population that is already suffering from malnutrition,” Nasir said. Currently, about 60% of Pakistani children under the age of five suffer from anemia, and 40% suffer from stunting.
The tax increase, which is the highest on record at 40%, was implemented to meet the conditions set by the International Monetary Fund (IMF) for a new bailout package.
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