The Philippine Association of Flour Millers Inc. (Pafmil) on Thursday stressed that the antidumping duty being sought against cheap Turkish flour is a “just and fair” effort by the local flour industry to level the playing field, in view of dumping allegations against Turkey.
Pafmil Executive Director Ricardo Pinca said that Turkey dumps its flour too in many member-countries of the Association of Southeast Asian Nations (Asean), noting that Indonesia has imposed a 20-percent safeguard duty on Turkish flour on top of a previously existing 5-percent duty.
Dumping occurs when a country like Turkey exports a commodity at prices lower than its domestic pricing.
In 2010, while flour costs $600 a metric tons (MT), in Turkey, its export prices to Asean countries were only $284 to Indonesia, $276 to the Philippines, $317 to Thailand, $250 to Malaysia and $277 to Singapore.
In 2011, the domestic price in Turkey was also $600 a MT but its export prices were much lower. It was $388 to Indonesia, $388 to Philippines, $455 to Thailand, $385 to Malaysia and $424 to Singapore.
While Turkey raises a ruckus against Pafmil’s dumping duty petition, Pinca said that Turkey imposes a whopping 102.6- percent import duty on flour, effectively cutting off any foreign sourced flour in its country.
“Yet, Turkey wants to dominate the flour industries of other countries by presenting itself as a cheap alternative source to local produce,” he said, adding that Turkey espouses foreign competition in other countries where it sells its cheap flour, while preventing foreign competitors in Turkish soil.
“Due to subsidies provided by the government, Turkish millers are able to export flour, a finished product, at prices even lower than the raw material costs in other countries,” he said.
In 2012 alone, the volume of Turkish flour arrivals in the Philippine grew by 84 percent.
Pinca said that with the historical growth of Turkish flour exports to the Philippines pegged at 75 percent, he added that “it is just a question of time when Turkish flour will swamp the country and kill the local flour milling industry.”
Without the local flour milling industry, Pinca stressed that Turkey would monopolize and have absolute control of the volume and pricing of flour available in the Philippines. In such a scenario, Turkey can jack up its flour prices and Filipinos would not be able to do anything about it, he added.
In a statement, the Turkish Embassy in Manila have expressed concerns and dismay over statements of the United States Wheat Associates (USWA) about the antidumping investigation.
“We believe that intervention of third parties to such investigations cannot be considered as appropriate, and we expect not to experience such unfortunate occasions any more,” it added.
Earlier, the Washington-based export market development organization USWA hit Turkish government policies, which “encourage” flour dumping in the Philippines.
Joseph Sowers, USWA assistant regional director for South Asia, said that the Turkish government employs a complex, inward processing scheme that creates disruptive incentives to its milling industry to export flour regardless of price.
The Turkish government denied the allegation, noting that the scheme is fully compatible with the pertinent World Trade Organization regulations, which Turkey has also agreed, and Article VI of the General Agreement on Trade and Tariffs 1994 has allowed the usage of such scheme.
The Turkish Embassy also emphasized that they perceive the Philippines as a close trading partner in Southeast Asia, giving great importance in promoting bilateral trade relations toward an upper level in years to come.
As of 2012, the bilateral trade between the Philippines and Turkey exceeded $300 million and reached $150 million in the first five months of 2013.
“Within this framework, I would like to state that Turkish wheat flour exports to the Philippines represent a major proportion, approximately 48 percent in 2012 and 39 percent in the first five months of 2013, of Turkey’s total commodity exports to the Philippines,” the Turkish Embassy said.