20%-import duty on Turkish flour fair | Inquirer Opinion

20%-import duty on Turkish flour fair

/ 10:45 PM August 16, 2013

I would like to thank Neal Cruz for inviting me to the Aug. 5 Kapihan sa Manila. However, I would like to clarify some of the points in his Aug. 7 column.

First, the antidumping duty being sought by the Philippine Association of Flour Millers Inc. (Pafmil) on Turkish flour cannot be said—not by any stretch of the word—to be “protectionist.” It is Turkey that is the protectionist; it imposes an import duty of 102.6 percent on foreign wheat flour entering its borders. Yet it complains against the 20-percent antidumping duty the Philippines would like to impose on Turkish flour?

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I’d like to stress: Pafmil’s petition is a just and fair effort to stop Turkey’s creeping monopoly of flour supply in the Philippines and protect the Philippines’ flour milling industry from unfair competition.

The fact is, Turkey exports to us its flour at dumping prices or way lower than its domestic price, and this is definitely unfair trade practice.

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As pointed out by Joseph Sowers of the US Wheat Associates, “export prices for Turkish flour are even less than the market price its millers must pay to buy wheat to make its flour, in part because the Turkish government sets artificially high support prices for its wheat farmers while currently imposing a 130-percent duty on imported wheat.”

Clearly then, the proposed 20-percent antidumping duty on Turkish flour being considered is fair considering that any country selling flour to Turkey must pay a 103-percent duty to the Turkish government, Sowers said.

Here, we are not even talking about smuggled Turkish flour which is sold even cheaper locally under the guise of global trade, resulting in millions of pesos in foregone government revenues from uncollected taxes.

It may be true that Turkish flour, at present, represents only 10 percent of flour usage in the Philippines, but Turkish flour exports to the Philippines have been increasing through the years.

In 2012 alone, the volume of Turkish flour arrivals in the Philippines grew by 84 percent. On the other hand, the historical growth of Turkish flour exports to the Philippines pegged at 75 percent. It is just a matter of time before Turkish flour swamps the country and kills the local flour milling industry.

When that happens, we would not only lose thousands of jobs generated by our milling industry but, worse, we would be at the mercy of Turkish flour exporters and their local distributors. Then Turkey can jack up its flour prices and we Filipinos would not be able to do anything about it.

Cheap bread made from smuggled or imported Turkish flour sold at dumping prices is just what we Filipinos call  pakagat . There won’t be cheap bread once Turkey has a monopoly of the Philippines’ flour supply.

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As Sowers has said, it is in the best interest of the Philippines to maintain a strong milling industry as it would “be shortsighted to rely on an unfairly subsidized foreign industry to provide the primary supply of such a critical commodity as flour.”

—RIC M. PINCA,

executive director,

Philippine Association of Flour Millers Inc.

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TAGS: flour, Letters to the Editor, neal cruz, opinion, Pafmil, Philippine Association of Flour Millers Inc., Ric M. Pinca
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