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Factors affecting Import Shares of Powdered Milk and
other Milk Products and their Implications in Sri Lanka
C. Bogahawatte and Janaranjana Herath *
ABSTRACT
Import shares of liquid milk, powdered milk, condensed
milk and other milk products were estimated to determine their relative
competitiveness. The change of import shares with changes of
exchange rate and world price of milk. The analysis based on yearly
data between 1975-2006 showed that relative CIF prices and incomes were
important factors influencing the market shares of milk and milk
products. The results also showed that imported milk powder is price
inelastic and a weak substitute for other imported milk products. The
milk powder import shares will decline marginally with depreciation of
exchange rate by 5% and increase of world price of milk over a
forecasted period of 5-7 years. However, these changes are not
significant.
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*
The authors are, respectively, Senior Professor, Department of
Agricultural Economics and Business Management, Faculty of Agriculture
and Research Assistant, PGIA, University of Peradeniya, Sri Lanka.
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Bogahawatte
and Herath 2006 Sri Lankan
Journal of
Agricultural Economics. Volume 8 (1). Pp. 21 - 30
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