RP negotiators urged to convince China to cut tariff on carageenan

MANILA, Philippines - The Seaweed Industry Association of the Philippines (SIAP) is urging trade negotiators to convince China to lower the tariff on Philippine carageenan exports under the umbrella of the Association of Southeast Asian Nations (ASEAN)-China Free Trade Agreement.

In an interview with The STAR, Benson Dakay pointed out that China currently slaps an effective tariff of almost 35 percent on Philippine carageenan exports. He said this is based on a 17 percent actual tariff with a 12 percent value-added tax, plus various other charges and fees.

Dakay pointed out that China is the future growth market for the Philippines and other seaweed-exporting countries such as Indonesia.

Because of their economic problems, the traditional carageenan markets of the United States and Europe are virtually stagnant at this time, he added.

The Philippines exports annually about 25,000 tons of processed carageenan with a value of around $200 million.

China, at present, imports about 50,000 tons of raw seaweed from Indonesia and about 10,000 of cottonii seaweeds from the Philippines, but slaps a duty on carageenan imports.

China has a domestic carageenan industry but is still sourcing its raw seaweeds from the Philippines and Indonesia. Raw seaweeds cost less than processed carageenan.

Since the Philippines and Indonesia both have raw seaweeds and processed carageenan, it is preferable to export the more value-added carageenan, especially in the face of increasingly lower seaweed production.

Philippine negotiators, Dakay said, should help promote and protect the interest of SIAP which, unfortunately, has been left to fend for itself.

Chinese carageenan producers, on their part, enjoy full support from their government, even enjoying a 13.5 percent subsidy for their carageenan exports.

SIAP officials and members are scheduled to meet with Agriculture Secretary Proceso Alcala this week in Cebu.

Dakay said SIAP will seek Alcala’s help in gaining access to the potentially lucrative Chinese market.

Dakay is optimistic that Philippine carageenan exports could easily increase to 35,000 tons if the Chinese tariffs are lowered on carageenan imports.

However, aside from the Chinese tariff issue, Dakay said SIAP will also ask the new DA head for support on increasing domestic seaweed production which has dropped from its peak production levels in the past of 120,000 tons to just 80,000 tons for this year.

Hand-in-hand with production concerns, Dakay said there is a need for government’s assistance to credit for seaweed farmers as well as for technical assistance from the Bureau of Fisheries and Aquaculture Resources in terms of new areas and technologies for seaweed farming.