Local flour millers on Monday hit “protectionist measures” by Turkey, which imposes a 102.6-percent duty on flour exported to its country while vehemently opposing the 20-percent dumping duty filed before the Philippine government.
Ricardo Pinca, Philippine Association of Flour Millers (Pafmil) executive director, said that Turkey wants to continue exporting their flour to other countries at lower tariff, yet it prevents any country from shipping even a single sack of flour to Istanbul by slapping a whopping 102.6-percent duty on the commodity.
“Obviously Turkish flour manufacturers just want to have their cake and eat it too,” Pinca said in a statement.
He stressed that the anti-dumping duty being sought by Pafmil against Turkish flour imports is a fight for just and fair international trade.
“Competition in a free market is fine so long as everyone plays by the rules. Turkey does not play fair,” he said.
“It dumps flour using a Turkish government subsidy system that encourages export of flour at whatever cost, while keeping domestic prices higher to keep Turkish mills churning flour and keeping their owners happy,” Pinca added.
Pafmil’s anti-dumping petition seeks to level the playing field in view of Turkey’s dumping of its cheap flour in the Philippines, adding that Istanbul dumps its flour too in many member-countries of the Association of Southeast Asian Nations (Asean).
To recall, 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.
Proof of dumping
In 2010, while flour costs $600 a metric ton, 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, domestic price in Turkey was also $600 a MT but its export prices were much lower at $388 to Indonesia, $388 to Philippines, $455 to Thailand, $385 to Malaysia and $424 to Singapore.
Because of subsidies provided by its government, Pinca said that Turkish millers are able to export flour, a finished product, at prices even lower than the raw material costs in other countries.
“While it may be true that Turkish flour at present represents only 10 percent of flour usage in the Philippines, Turkish flour exports to the Philippines have been increasing through the years so much so that, coupled with its dumping scheme, there is real danger of Turkish flour eventually killing the local flour milling industry,” he added.
In 2012 alone, the volume of Turkish flour arrivals in the Philippine grew by 84 percent. With the historical growth of Turkish flour exports to the Philippines pegged at 75 percent, it is just a question of time when Turkish flour will swamp the country and kill the local flour milling industry.
“The cheap price of Turkish flour is just a temporary enticement intended to get customers and displace local producers,” he said.
“But once local millers have been shut out of the industry, the Turkish exporters will surely raise their prices. And by then, no one can do anything,” the Pafmil official added.
When that happens, Pinca said that the Philippines would not only lose the thousands of jobs provided by the local flour milling industry, but would place the country at the mercy of Turkish flour exporters and their local distributors.