Sri Lanka's Dairy Industry Overview

Sri Lanka, a vibrant nation in South Asia, is experiencing significant changes in its dairy industry. Despite efforts to boost local production, the country remains heavily reliant on imports to satisfy domestic demand.

Milk Production and Dairy Cattle

Sri Lanka manages a cattle population of approximately 1.2 million, predominantly overseen by smallholder farmers. The annual milk production reaches about 450 million liters. However, this volume falls short of national demand, necessitating substantial imports.

Milk Processing and Product Diversification

The country's milk processing capacity extends to around 300 million liters annually, supporting both local consumption and exports. The industry produces a variety of dairy products, including liquid milk, cheese, and milk powder.

Cheese, Milk Powder, and Whey Production

Sri Lanka produces approximately 6,000 metric tonnes of cheese each year, alongside 80,000 metric tonnes of both milk powder and whey. These products are crucial for the nation's food sector and significantly contribute to the export economy.

Key Dairy Enterprises

Pelwatte Dairy Industries
Milco (Pvt) Ltd.
Ambewela Products (Pvt) Ltd.

These companies play pivotal roles in the domestic processing landscape, driving product innovation.

Significant Dairy Farms

Ambewela Farm
New Zealand Farm
Polonnaruwa Milk Industries

Export and Import Dynamics

Sri Lanka exports around 20,000 metric tonnes of dairy products annually, primarily targeting neighboring markets. Conversely, imports exceed 100,000 metric tonnes, with a significant portion being milk powder sourced from New Zealand and Australia.

Significant Dairy Market Event

A notable market event impacting Sri Lanka's dairy industry is Fonterra's strategic divestment to focus on operations in New Zealand. This move may alter local supply dynamics, emphasizing the need for alternative suppliers or enhanced local production capabilities. Despite this shift, Fonterra continues efforts to support local production through initiatives like the Milk Collection & Chilling Centre in Hanwella.

Conclusion

As Sri Lanka navigates Fonterra's strategic changes, the industry stands at a pivotal crossroads. By enhancing local production and reducing import dependency, stakeholders should pursue partnerships to strengthen industry resilience. Looking ahead, Sri Lanka aims to triple its fresh milk procurement by 2029, with plans to establish new dairy collection hubs nationwide, transforming the sector and increasing milk production.

National Competency Standard

Fonterra Brands Lanka, with various stakeholders, has launched Sri Lanka's first National Competency Standard for dairy machine operators. This initiative signifies a landmark development in the vocational education sector, aiming to formalize and recognize the skills of experienced operators in the dairy industry.

Modified: 2025/08/11