Sri Lanka's Dairy Industry Overview
Sri Lanka, a vibrant nation in South Asia, is experiencing significant transformations in its dairy industry. While the country is striving to boost local production, it remains heavily reliant on imports to meet domestic demand.
Milk Production and Dairy Cattle
With a cattle population of approximately 1.2 million, predominantly managed by smallholder farmers, Sri Lanka produces about 450 million liters of milk annually. Despite this, the volume is insufficient to satisfy national demand, necessitating substantial imports.
Milk Processing and Product Diversification
The nation's milk processing capacity stands at around 300 million liters annually, supporting both local consumption and export activities. 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 and around 80,000 metric tonnes of both milk powder and whey annually. These products are essential for the country's food sector and play a significant role in the export economy.
Key Dairy Enterprises
Leading companies such as Pelwatte Dairy Industries, Milco (Pvt) Ltd., and Ambewela Products (Pvt) Ltd. are pivotal in the domestic processing landscape, driving product innovation. Notable dairy farms include Ambewela Farm, New Zealand Farm, and Polonnaruwa Milk Industries.
Export and Import Dynamics
Sri Lanka exports approximately 20,000 metric tonnes of dairy products annually, primarily targeting neighboring markets. Conversely, the country imports over 100,000 metric tonnes, with a significant portion being milk powder sourced from New Zealand and Australia.
Significant Dairy Market Event
A notable event impacting Sri Lanka's dairy industry is Fonterra's strategic divestment to focus on operations in New Zealand. This shift may alter local supply dynamics, emphasizing the need for alternative suppliers or enhanced local production capabilities. Despite this change, Fonterra continues 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, along with various stakeholders, has launched Sri Lanka's first National Competency Standard for dairy machine operators. This initiative is a landmark development in vocational education, aiming to formalize and recognize the skills of experienced operators in the dairy industry.
Government Initiatives
Sri Lankan President Anura Kumara Dissanayake has outlined a strategic focus on agriculture and livestock to bolster the national economy in upcoming budget plans. The government is engaging with stakeholders to enhance its dairy industry, aiming to meet local milk demand and tap into export opportunities.
Modified: 2025/09/27