Local flour industry sees tough 2017

MANILA, Philippines - The country’s flour industry is set to face a challenging 2017 amid higher prices of raw materials coupled with the entry of new competitors.

The Philippine Association of Flour Millers (PAFMIL) said the country’s wheat flour milling industry is in for a bumpy ride with new firms setting up shop in the country.

“The wheat commodity market has consistently moved up in recent days due to strong demand from foreign markets,” PAFMIL executive director Ric Pinca said.

“With strong competition from new flour mills, the industry expects to import more wheat this year, thus assuring a stable supply of flour for a growing and more sophisticated bakery industry,” he added.

Last year, the flour market grew almost five percent on the back of a robust economy and increased purchasing power from consumers.

Flour consumption, including imports, reached 84.6 million 25 kilogram-bags, 4.6 percent higher than the previous year’s flour usage.

The Philippines imported 2.6 million metric tons (MT) of wheat last year, up four percent from  2.5 million MT in 2015.  Of the total, 95 percent came from the US.

Meanwhile, PAFMIL insisted that the government’s imposition of increased anti-dumping duties on Turkish flour imports was reasonable and within the law.

Turkish flour millers have started to question the government’s imposition of additional duty on flour exports to the Philippines.

“The Turkish Flour, Yeast and Ingredients Promotion Group should not feign innocence of this dumping duty imposition because it took part in the Philippine Tariff Commission hearings on this issue and was found dumping flour and posing an imminent threat to the local industry,” he said.

Turkish flour millers were found dumping flour in the Philippines, prompting the government to hike the duty to 16.9 percent from 2.6 percent.

The dumping duty was imposed in 2014 and is effective for five years. Dumping is the export of products at prices lower than their price in the domestic market.

“Why are they questioning it only now when they could have appealed their case immediately? Pafmil raised the issue of Turkish flour dumping with the Tariff Commission, we proved our points and justified our claims with appropriate data. We won our case,” he said.

Turkish flour imports dropped to 450,000 MT last year from the average of 600,000 MT per year.