ISLAMABAD, Oct 26: The government is likely to levy provisional regulatory duty on import of milk powder aimed at protecting local industry against the low-priced imported milk, an official source said on Saturday.

To implement the decision, the government would require to introduce a provision in the Customs Act, 1969, to enable the levy on the same.

The decision to this effect was expected to be taken in the next meeting of the Economic Coordination Committee (ECC), the official said, adding that the ministry of industry had already moved the summary about it of the ECC approval.

According to the official, the summary was moved following the representation of Pakistan Dairy Association regarding low-priced import of milk powder and its effects on the local industry.

Official figures showed that local milk production had shown an impressive growth of 111 per cent from 12,959 metric tons to 27,331 metric tons during the last three years.

Following the rise in local production, the import of milk powder also declined from 16,879 metric tons in 1999-2000 to 6,397 tons in 2001-02.

The figures, the officials said indicated the installed production capacity of the local milk industry, which exhibited a cumulative growth of 92 percent during the year 1999-2000 to 2002-03. With this trend, it was expected that complete import substitution could be achieved by 2005, the official added.

Elaborating further, the official said the present terms of customs duty, import regime and subsidies given by the exporting countries have resulted in sudden surge in the import of milk powder at low price.

The current landed cost of imported milk powder was Rs 2.200 per bag of 25kg as compared to the local production cost of Rs 2,800 in the same packing.

According to Pakistan Dairy Association, the main reason for low price of imported milk powder was the subsidy of $830 per tons by European Union and United States.