Department of Trade and Industry reviews flour prices

MANILA, Philippines - The Department of Trade and Industry (DTI) is reviewing the price of flour in order to determine if prices should go down to more affordable levels given the implementation of the zero tariff and the worldwide reduction in prices.

“The price of flour should go down as fast as the price of wheat,” Trade Undersecretary Zenaida C. Maglaya told reporters yesterday.

The price of wheat is $280 to $310 per metric ton. Same as the August 2007 levels while the price of flour is P780 to 825.

Magalaya said this means that the prices now are higher because unlike in 2007, there is no more tariff on imported wheat.

Maglaya said they have already received complaints from consumers which prompted the review in prices. She said the study will be completed at the soonest possible time.

Earlier,the flour industry said they expect to bounce back this year after a tumultuous 2008 wherein prices became unstable as a result of the spike in oil prices experienced during the first part of the previous year.

“We expect 2009 to be a better year. All market indications point to a positive outlook,” Ric M. Pinca, executive director of the Flour Millers Association (PAFMIL) said in an interview.

Pinca said flour production dropped to only 1.8 million metric tons in 2008 when compared to the two million metric tons in 2008 recorded the previous year.

“We will recover lost ground this year. For sure we will post growth,” he added.

Pinca said for 2009, production will be back to two million metric ton.

The reason, he said is the decision of the government to lift the tariff on wheat and the good harvest from Australia and the United States .

With regards to the tariff, Pinca said they hope the government makes the zero tariff permanent.

“We need a lot of cooperation from everybody to make it permanent so that the consumers can benefit,” Pinca said.