PAFMIL vows to keep prices, supply stable if govt remedies Turkish flour issue

Flour millers on Wednesday vowed to keep prices of locally-milled flour unchanged and keep market the well-supplied if the government will address the alleged dumping of Turkish flour into the Philippines.

 

The Philippine Association of Flour Millers (PAFMIL) wants Department of Agriculture to raise the import duty on Turkish flour to 20 percent from 7 percent, but community bakers strongly opposed the move on grounds that it will raise their operating expenses.

 

As a consequence, community bakeries will be forced to lay-off  employees or close shop because of the higher cost of raw material, according to the Filipino-Chinese Bakery Association.

 

Apart from that, higher cost of input will mean a matching increase in prices of bread and other four-based products, the bakers claimed.

 

But the flour millers are bent on pursuing their case before the Agriculture Department. 

 

“If the duty is imposed, we can increase production capacity to meet the enlarged demand,” PAFMIL Executive Director Ric Pinca told reporters in an interview Wednesday. “If there is increased demand, there is also an opportunity for expansion of operations,” he added.

 

“We believe locally-produced flour has the versatility and quality local consumers desire for their bread and our prices are competitive in a trading condition,” Pinca noted.

 

PAFMIL expects the Agriculture Department to come up with a decision by September, arguing that dumping of Turkish flour into the country violates World Trade Organization (WTO) rules and noting 

that dumping occurs when imported commodities are markedly lower lower than its domestic prices.

 

The influx of Turkish flour has caused PAFMIL members—which include  RFM Corporation, Liberty Flour Mills, Wellington Flour Mills, Universal Robina Corporation, General Milling Corporation, Philippine Four Mills and Pilmico Foods Corporation—to operate at 50 percent capacity, the millers claimed.

 

Citing November 2012 data, PAFMIL said Turkish flour is sold in the Philippines for $348 per metric ton (MT) against their output of $470 per MT.

 

Bakers buy Turkish Flour for P700 to P750 per 25-kilogram, which compares with P750 to P900 per 25 kg bag for locally-milled flour.

 

Philippine flour millers is importing 2.2 million MT of wheat this year to produce 1.6 million MT of flour.

 

Nine to 10 percent of the domestic flour requirement comes from Indonesia, Vietnam, Australia and India. According to PAFMIL, flour from these countries are sold at market prices, not dumping rates. — VS, GMA News