Milk prices in Pakistan have skyrocketed by over 20% due to a new tax, making milk more expensive in Karachi than in cities like Paris, Melbourne, and Amsterdam.
Now, ultra-high temperature (UHT) milk costs 370 rupees ($1.33) per liter in Karachi, compared to $1.23 in Paris, $1.08 in Melbourne, and $1.29 in Amsterdam, according to Bloomberg data.
The price increase is the result of an 18% tax imposed as part of recent budget changes. Previously, milk was exempt from taxes in Pakistan. This new tax policy has drastically raised milk prices.
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Muhammad Nasir, a spokesperson for the local unit of Dutch dairy producer Royal FrieslandCampina NV, said that before the tax, milk prices in Pakistan were similar to those in developing countries like Vietnam and Nigeria. The new tax has caused retail prices to jump by as much as 25%.
The hike in milk prices is expected to worsen inflation in Pakistan, where wages have remained stagnant and purchasing power is decreasing.
The recent budget, which introduced a record 40% tax increase, is part of the government’s efforts to meet the requirements set by the International Monetary Fund (IMF) for a new bailout package.
This massive increase in milk prices is likely to put additional financial strain on Pakistani households, which are already struggling with high inflation and economic challenges.
