Northern Foods urges DA to resolve anti-dumping case vs China

Northern Foods Corp. (NFC), the country’s biggest tomato paste producer is urging the Department of Agriculture (DA) to immediately resolve the anti-dumping case it filed against China which has been flooding the country with cheap tomato paste.

NFC chair Bernardo JB Mitra in a letter to Agriculture Undersecretary Segfredo B. Serrano said it has been four years since the case was filed and yet no action has been taken by the department.

"The Trade Remedies Office of the Department has in fact established that there was indeed dumping of tomato paste from China. However, we cannot understand why, notwithstanding such finding, no remedy was recommended or instituted by your office," stated Mitra’s letter.

"If there is a finding of dumping, the corresponding remedy must be forthcoming, and definitely we cannot accept the excuse that over all those years basic documents cannot be obtained from the Bureau of Customs," Mitra said.

The petition filed by NFC was the first anti-dumping case in the agriculture sector and its outcome would be significant especially since the entry of imported agricultural products have already led to the collapse of other sectors such as the onion and garlic industries.

Aside from the dumping case, NFC also asked the Tariff Related Matters (TRM) committee headed by Economic Planning Secretary Romulo Neri to grant its petition for a two-tiered import tariff to shield the struggling local tomato industry from the influx of cheap tomato paste from China.

"The bottomline is that we cannot compete against the very low cost and massive scale of production of other countries, particularly China," said Mitra.

He said that in 2004, NFC brought down its prices at P29.96 per kilo of paste but tomato paste from China with the same brix specifications as NFC’s but with lower quality in terms of color, mold count and pesticide residue level, was coming in since January this year at only P28.06 per kilo.

Thus, NFC wants to increase current import tariff on tomato paste from 10 percent to 30 percent for 28-30 Brix content and to also impose a different import tariff for tomato paste with Brix content above 30.

Brix is the standard unit of measure of the percentage of natural tomato soluble solids (NTSS) which is the value used to measure the solids attributes of a tomato product. Tomato paste must not contain less than 24 Brix NTSS.

NFC currently produces an average of 6,000 metric tons (MT) tomato paste yearly with 28-30 Brix content, the same kind being exported into the Philippines by China at about 4,000 MT, while Italy and the United States bring in tomato paste with 32 Brix and above.

Mitra said the proceeds from the tariff on the 28-30 Brix could be used to upgrade the facilities of the 20-year-old tomato processing plant and enable it to produce the higher-end 32 brix that would expand its market.

Mitra said that while a 30-percent tariff hike should be imposed on tomato paste with 28-30 Brix, the NFC is comfortable with maintaining or lowering the tariff for the 32 Brix tomato paste.

NFC is not currently producing 32 brix but a plant upgrade will enable it to supply major food processing companies like Del Monte Philippines which imports about 10,000 metric tons yearly of 32 brix tomato paste.

NFC desperately needs funds to upgrade its plant but its loan proposal was turned down by the DA’s Agricultural Competitiveness Enhancement Fund (ACEF), the Development Bank of the Philippines and Land Bank of the Philippines.

NFC since 1984 has been supplying Jollibee Foods Corp., its biggest customer, Genosi which toll packs for McDonalds Phils., California Manufacturing Co. Inc., RAM Food Products Inc., Del Monte Phils., Heinz-UFC Phils. Inc., San Miguel Foods, Purefoods-Hormel, major fishcanners, toll packers and sauce and ketchup manufacturers.