DA to recommend provisional duty on imported Turkish flour

MANILA, Philippines - The Department of Agriculture (DA) is inclined to recommend to the Tariff Commission the imposition of a provisional duty on Turkish flour while public hearings on the concerns of small flour millers and community bakers are conducted.

Agriculture Secretary Proceso Alcala said that based on the assessment of the Philippine agriculture office in Turkey, the domestic price of Turkish flour was found to be lower than its selling price in the Philippines.

Dumping occurs when a country exports a commodity at prices lower than its domestic prices.

“I have already signed an administrative order which is effective immediately,” Alcala told reporters Wednesday night.

 â€œA 20 percent duty can be imposed (on Turkish flour) so there can be a level playing field for the meantime. We have had initial consultations on this,” he said, noting that the issue has been around for quite some time. 

Local flour millers represented by the Philippine Association of Flour Millers (PAFMIL) is petitioning the Agriculture department to look into the alleged dumping of Turkish flour into the country and to recommend to the Tariff Commission to raise  the import duty on Turkish flour to 20 percent from the current seven percent.

PAFMIL represents RFM Corporation, Liberty Flour Mills, Wellington Flour Mills, Universal Robina Corp., General Milling Corp., Philippine Four Mills and Pilmico Foods Corp.

The move to raise flour tariff is being opposed by a group of community bakers represented by the Filipino-Chinese Bakery Association (FCBA), who argue that small bakeries cannot cope with higher operating costs and may have to lay off employees or close shop.

The small bakeries warned they would also have to raise the prices of bread and other flour-based products if import duty on Turkish flour is increased.

Alcala said PAFMIL has assured the DA that they would not raise prices once the issue is addressed.

“What’s good about this is that flour millers have given us a guarantee that they will not increase prices,” he said.

PAFMIL executive director Ric Pinca said their member companies are prepared to increase production  with increased domestic demand if higher duty is imposed on Turkish flour.

The group also promised not to raise prices and maintain a stable supply.

Pinca said that because of the influx of cheap Turkish flour, PAFMIL member companies only use 50 percent of their factory capacities.

PAFMIL argued the supposed dumping of Turkish flour into the country is a violation of World Trade Organization (WTO) rules.

PAFMIL said that as of Nov. 2012, Turkish flour is sold in the Philippines for $348 per metric ton (MT) against a domestic price of $470 per MT.