LIFTING the anti-dumping duties on Turkish wheat flour may upend the local flour milling industry’s growth since it would be exposed to “unfair” trade practices anew, an industry group claimed.
The Philippine Association of Flour Millers Inc. (Pafmil) maintained its position that the anti-dumping duty on imported Turkish wheat flour must be extended for a second time. (Related story: https://businessmirror.com.ph/2023/09/14/manila-begins-review-of-anti-dumping-duty-on-flour/)
If the Marcos administration allows the trade remedy to expire, the local market was flooded by “dumped” Turkish flour, which occurred in 2015, according to Pafmil, the petitioner to extend the anti-dumping duties.
“We will not be able to sell our finished product as [these] will be unable to compete with the dumped wheat flour in the market,” Pafmil Executive Director Ricardo M. Pinca said during the first day of a hearing organized by the Tariff Commission (TC). The TC held a public hearing last Wednesday to review the expiration of the anti-dumping duty on the imported commodity.
Mario Banag, assistant to the Pafmil president, presented the discrepancy between the landed cost of Turkish wheat flour and Vietnamese wheat flour to prove the group’s point that the latter are being “dumped” to the Philippines.
According to Banag, the landed cost of Turkish soft flour between the years 2020 and 2022 was more expensive at $45.77 to $254.7 per metric ton compared to that of the Vietnamese soft flour.
This translated to a per 25-kilogram bag price difference of P100.64 to P392.28 in the last three years, he added.
Banag claimed that the Philippines remains a “target” market for Turkish wheat flour. Thus, the Pafmil official said, lifting the anti-dumping duties would mean resumption of more exports to the country.
Vietnam rising
However, TC Chairman Marilou P. Mendoza quizzed Banag on why Vietnam has become the Philippines’s top wheat flour supplier if it is way more expensive than that of Turkey.
“Why would I buy more expensive Vietnamese [wheat flour] if the Turkish product is available?” Mendoza asked.
Banag responded that Vietnamese wheat flour’s quality is almost the same quality as locally produced wheat flour, making it a preferred alternative choice by domestic bakers.
“[Vietnam’s wheat flour exports] will continue [to increase] a little. Most Philippine bakers prefer locally milled flour than Vietnamese flour. But the volume of Vietnam [imports] is tolerable compared to the volume of locally milled flour,” he argued.
“If anti-dumping duties will be removed then Turkey again will [return] to its original export [volume] to the Philippines. We are not questioning Vietnam because they are not dumping,” he added.
But Banag’s response did not sit well with TC Commissioner Enresto L. Albano, pointing out that his explanation did not support the argument that lifting the anti-dumping duty would drive Turkey to “pursue” the Philippine market more.
Turkey’s intervention
BÜLENT Hacıoğlu of Trade Resources Co. (TRC), which represents the oppositor, intervened that if Philippine bakers prefer Vietnamese wheat flour because of its quality then local flour millers must not be threatened by Turkish wheat flour.
“Even if Turkey raises or lowers its prices, if they prefer Vietnamese [wheat flour] then why is the anti-dumping measure necessary? We’re lower [in terms of prices] but bakers are buying more Vietnamese products,” Hacıoğlu said.
“[Anti-dumping duties] protect us from dumping; because dumping is imminent because of cheap Turkish flour,” Banag retorted.
“But you just said that the price is not that important,” Hacıoğlu said.
TRC Senior Manager Gülden Bozdeniz argued that there has been no “substantial” evidence to prove that there has been “injury” to the domestic flour milling industry to impose anti-dumping duties on Turkish wheat flour.
Bozdeniz claimed that Banag’s data was “incorrect,” arguing that the Turkish wheat flour export price of $198 per metric ton is “unreal” and is “very much” lower than the actual export price of Turkish producers.
“There is no quantitative data of domestic injury,” she pointed out.
Bozdeniz’s presentation showed that Turkey’s share in the total imported wheat flour by the Philippines has dropped to 22 percent from 52 percent since the imposition of the anti-dumping duties.
Bozdeniz emphasized that Vietnam has replaced Turkey as the Philippines’s top supplier and yet the local flour milling industry is not complaining about it.
Furthermore, the TRC executives argued that the bottom lines of some of flour millers―such as Pilmico Foods Corp. and Universal Robina Corp.―increased last year, dismissing the presence of domestic injury.
Bozdeniz said there is no more threat of injury since Turkey is not anymore interested in exporting wheat flour to the Philippines, as it is not a “significant” market for exporters compared to before.
“There are more attractive markets around Turkey who are in need of Turkish wheat flour because of war, such as Syria, Iraq, Yemen, Venezuela, Angola and Somalia,” she said. According to her, the Philippines accounted for only 0.12 percent of Turkey’s wheat-flour exports last year and ranked 36th in all of the country’s export markets.
“The Philippines is the only importer that has anti-dumping duties against Turkish [wheat flour imports],” she added.
The Philippines imposed the anti-dumping duty on Turkish wheat flour from 2015 to 2020. It was extended for another three years or until later this year.
Anti-dumping is a trade remedy allowed under World Trade Organization agreements. It permits a state to impose additional duties on products that are being exported at a price that is lower than the prevailing market price in the country of origin. The anti-dumping duties allow the price of exported product to be at parity with its home market price level.
Under the extended measure, the Philippines imposed anti-dumping duties on Turkish wheat flour of up to 29.57 percent; depending on the exporter.
