The price of milk and dairy products will increase between 2.8 and 3.5 percent on January 1, 2008. One liter of milk will thus cost ISK 87 (USD 1.32, EUR 0.92) instead of ISK 85 (USD 1.35, EUR 0.94). The decision was made by the Price Committee of Farm Products on Wednesday.
According to director of the Association of Icelandic Dairy and Beef Cattle Farmers Thórólfur Sveinsson, who also has a seat in the committee, the reason for this decision is that the price of production and distribution has gone up. Morgunbladid reports.
The last time the committee decided to increase the price of milk and dairy products was two years ago and since then the consumer price index has risen by 13 percent.
Sveinsson said the price of fertilizers is expected to increase considerably next year, by 40 to 50 percent, as well as the price of fodder, and therefore it is likely that the price of dairy products will rise even more.
Food prices are at a record high around the world and this year the price of dairy products in Europe has risen by 15 percent while, until now, they have remained unchanged in Iceland.
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