Breaking bread—and flour

At the moment, cheap imported Turkish flour that has found its way into the country is used mainly in bread sold by “small bakeries, by makers of noodles sold in public markets, and cheap, unbranded pasta,” as Ric Pinca, executive director of the Philippine Association of Flour Millers Inc. (Pafmil), enumerates.

The Pafmil is in the thick of campaigning among government agencies, like the Department of Agriculture and the Department of Finance (chiefly the Tariff Commission), for the imposition of higher tariffs on Turkish flour imports. It accuses Turkish flour exporters of “dumping”—that is, selling their product in foreign markets, including the Philippines, at prices much lower than their own domestic prices.

And, says Pinca, “this is not just an issue for the Philippines, it is an Asean issue.”

However, he says, our neighbors have yet to agree to take a unified stand against Turkish flour, or act on the “dumping” of flour from Turkey, which is the world’s biggest exporter of wheat flour. (The United States, which has been the country’s major supplier, exports wheat to the Philippines, which is then processed into flour by local manufacturers.)

Other Asean countries have acted individually on the issue. Indonesia, which is Turkey’s second biggest export market (after Iraq), has taken the unprecedented action of imposing a new 20-percent “safeguard duty” on Turkish flour, which resulted in an 18.6-percent reduction in Turkish flour imports in 2012, and an even more drastic fall last year, with imports tumbling from 209,466 metric tons in 2012 to 7,766 metric tons by July of 2013.

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IN CONTRAST, “the reverse happened in the Philippines,” says Pinca, citing figures that show a 68.6-percent rise in Turkish flour imports between 2011 and 2012, with much the same level of increase last year. The Pafmil claims the drop in export levels in Indonesia was compensated for by the increase in exports to the country.

The Pafmil—but not, puzzlingly, other domestic flour milling groups—filed an antidumping petition against Turkish flour in 2013, with the Department of Agriculture accepting the petition and finding “probable cause” for a preliminary investigation.

The DA imposed additional import duties on Turkish flour, although the rates vary from importer to importer, according to Pinca.

But aren’t local consumers benefiting from the lower-priced flour even if it’s flour made in Turkey? Pinca says the lower prices may benefit consumers in the short run, but in the long run, if and when Turkish imports succeed in killing off domestic competitors, the importers would then be free to jack up prices almost at will.

Which is why, Pafmil members say, despite their efforts to price Turkish flour at more competitive levels, Filipino consumers will not be adversely affected.

In an advisory, the Pafmil assured consumers that there would be no increase in the prices of their flour products, and therefore no corresponding uptick in the prices of breads like  pan  de  sal  and Pinoy Tasty, the two most common and cheapest breads patronized by ordinary Filipinos.

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OTHER flour millers and bread manufacturers, like San Miguel Mills and Philippine Foremost Flour Mills, which are members of the other association, the Chamber of Flour Millers, have also aired the assurance that their prices would remain unchanged while the tariff hearing is going on. Likewise, the Philippine Federation of Bakers’ Associations Inc. ruled out any increase in the prices of  pan  de  sal  and Pinoy Tasty.

What would happen if Turkish flour imports continue to flood the country and price the competitors out of the market?

Based on the levels of growth of the milled flour market in 2012, says Pinca, Turkish flour imports could earn as much as a 69-percent share of the Philippine market by 2017. “Local flour milling will no longer exist,” Pinca declares.

Hundreds, if not thousands, of flour mill workers will lose their jobs, with an average of 200 workers per mill at present falling to 75 workers in each mill that still manages to exist. At present, says Pinca, most millers operate at “50 percent utilization.”

The issue has an impact well beyond the price of pan de sal, “tasty” bread and other popular breads in bakeries. The looming takeover of Turkish flour over the domestic market, argues Pinca, will have “a negative impact on GDP growth, with domestic production substituted by imported goods.”

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WHILE Turkish flour at present can be found mostly in unbranded, unregulated flour products like noodles and bread in public markets, it’s not too farfetched to say that, if trends continue, it will be used by mainstream and commercial bakers.

“Turkish flour imports are jeopardizing the stability of the Asean flour milling industry,” asserts the Pafmil.

So it makes sense for Asean member-countries to pull together and act as one to counter the threat of cheap imported Turkish flour. Aside from “endangering” the “viability of the flour milling industry in Southeast Asian countries, it also poses a threat to the countries’ food security.” Says the Pafmil: “Turkish flour imports remain an unstable and undependable [source of flour]. It is also dependent on the availability of grains from foreign sources that usually embargo food exports to protect domestic supply.”

As we dunk our pan de sal in our coffee, or spread butter or jam on bread slices, we give little thought to the kind of flour that goes into these products. Maybe it’s time we wondered about the quality and safety of the flour we’re ingesting, and look beyond price points and availability when we judge whether we’re being fed well when we break bread, and for how long.