Dumping duties to cut back Turkish flour imports by 50%

MANILA, Philippines - The volume of Turkish flour exports to the Philippines is seen to fall by as much as 50 percent this year when the provisional dumping duties imposed by the Department of Agriculture (DA) take effect, traders said yesterday.

The provisional anti-dumping duties imposed by the DA last month is expected to take effect next week, lasting for four months while the Tariff Commission conducts a formal investigation into the dumping allegations made by local flour millers.

To be imposed on top of the regular import duty on Turkish flour imports is a provisional duty of as high as 21.79 percent on hard flour used for making bread, 39.26 percent on biscuit flour and 35.21 percent in soft flour which is used for pastries and cookies.

Traders said the slowdown in supply is expected to be felt in July when existing flour stocks have been exhausted.

“There are exporters that have already cancelled their orders,” said Ernesto Chua, president of the Malabon Longlife Trading Corporation, an importer and distributor of Turkish flour. “So we will sell all the remaining stocks.”

Cheap Turkish flour is used mostly by small bakeries for making pandesal and pastries.

“So we will be importing less,” said Chua, noting that the volume of flour imported from Turkey would be slashed by half.

Last year importers brought in 144,000 MT of flour from Turkey, enabling Turkish flour exporters to corner a market share of seven percent. With the provisional import duty in place, the market share would be reduced by three percent.

With reduced supply, bread prices are expected to rise by as much 20 percent, said Chua.

With high duties on Turkish flour, local flour importers may turn to Vietnam and Indonesia for cheap flour imports.

Dumping occurs when a country exports a commodity at prices lower than its domestic prices. According to the preliminary determination of the DA, Turkish flour is sold to the Philippines for an average of $348 per metric ton against a domestic price of $470 per metric tons. Flour is sold to bakers at P700 per 25-kilogram bag against P900 per 25-kilogram bag for locally-milled flour.

Cua claimed that the prevailing domestic price of Turkish flour averages at $400 per MT for soft flour and $450 for hard flour. The average selling price in the Philippines, he said, is “almost the same as the domestic price plus freight and other expenses.”

The Turkish Flour Yeast and Ingredients Promotion Group   (TFYI), of which Malabong Longlife Trading is a member of, is appealing for a suspension of the provisional duty before the Tariff Commission.

TFYI is an organization of traders exporting wheat flour and other Turkish product to the international market.

“Turkish flour exporters will present our case to prove that there is no need for any definitive anti-dumping measure. We are here to grow our partnership with the Filipinos, not only through trade relations but also through value valuable projects that will create meaningful and long-lasting benefits,” Avsin Kasikci, head of the visiting delegation, told reporters yesterday.