PHILIPPINE exporters of fructose syrup may have just lost one key market in Southeast Asia in Indonesia’s decision to enforce a safeguard duty of 24 percent on imports of the product.
The Department of Trade and Industry’s Export Marketing Bureau on Tuesday said Indonesia is set to impose safeguard duties on fructose syrup that will last for three years. The Indonesian Trade Safeguard Committee (KPPI) concluded there is a need to apply the trade measure after imports surged from 2015 to 2018 based on Jakarta’s data.
As such, the KPPI recommended to impose safeguard duties on fructose syrup imports at 24 percent on the first year, 22 percent on the second and 20 on the third and final.
The Philippines belongs to the list covered by the safeguard measure; therefore, the additional tariffs apply to fructose syrup exports to Indonesia. Fructose syrup used to be one of Manila’s million dollar shipments to Jakarta up until last year.
Based on data from the Philippine Statistics Authority, the country exported $1.03 million worth of fructose syrup to Indonesia in 2015.
In 2016 and 2017 the Philippines recorded zero shipment of the product to its Southeast Asian neighbor. In 2018 it sent 11.12 million metric tons of fructose syrup, amounting to $1.51 million, to Indonesia, before stopping exports again up until this year. Fructose syrup makers appear to no longer be interested in the prospect of exporting, posting no shipments at all after 2018.
With the safeguard measure executed by Indonesia, it may just be the dead end for Philippine exports of fructose syrup—or at least for three years. The last time the Philippines shipped the product in 2018, Indonesia imported more than 95 percent of the shipments, showing Jakarta is Manila’s largest buyer of fructose syrup.
The KPPI investigated the surge in fructose syrup imports in response to the petition filed by PT. Associated British Budi (ABB), who produces 54 percent of Indonesia’s domestic output of the product.
ABB argued before the KPPI the local market was flooded by cheap imports from China, citing a jump in figures from between 2015 and 2018. The KPPI then submitted a notification to the World Trade Organization last year to ask for comments from relevant parties.
The KPPI reported the imports of fructose syrup jumped for the period of investigation, and this trimmed the ABB’s market share and, consequently, income.
According to the KPPI, ABB endured losses on all fronts due to the import surge from 2015 to 2018. It reduced the firm’s domestic sales, production, productivity, capacity, operating profit and labor force.