Turkish Flour is reported to be cheaper than the local flour. According to Benito Lim, the president of the Filipino-Chinese Bakery Association, Inc. (FCBA) said that Turkish Flour costs P700 per bag, P200 lower than the price of the local flour. Also, according to the data of the Philippine Association of Flour Millers (PAFMIL), the export price of the Turkish flour costs P348 per metric ton (MT) while local flour would cost P470 per MT.
This is why the bakers disagree with the price hike of the Turkish flour that is already set on August 20, 2013, having the 7% import duty of the flour raised to 20%. These bakers prefer the Turkish flour since it is much cheaper compared to the local flour. Pinoy Tasty is said to be mostly made from Turkish flour. On the other hand, the millers would agree to the price increase of the flour since it would mean that these bakers would now choose to buy the local flour from them. Both sides have their own reasons on why or why not to continue the flour tariff hike.
According to the bakers, the price increase would close 25,000 small-community bakeries as it is more than half of their production cost. Their products, like the Pinoy Tasty, would cost from P3 per loaf to P40, and Pandesal would cost P1.50 per piece to P24 per bag. This made the bakers to buy huge amount of Turkish flour before the day of August 20 arrived.
Conversely, for the millers, they said that the price of the flour should not go up like that any time. According to Ric M. Pinca, the director of PAFMIL, said that Pinoy Tasty should only go up by P0.65 while pandesal would cost only P0.4 more. Another is that, if the Turkish flour continues to be imported to the country, by 2017, there will be a total takeover from the locally produced flour. An example that could lead to this is the massive importation of the flour during these past months, according to Pinca. In July, 14,000 MT or 594,700 bags of Turkish flour arrived which was 54% more from June. It is reported that the Philippine flour industry only grew 1 – 2% from last year and that the government should take action.
From what we see, both are trying to convince the departments that would be responsible for the price hike to abolish it or to push it through, no matter how their data appears to be unbelievable. For the bakers, it would be impossible for the Pinoy Tasty to cost P37 more per loaf. The government would likely to regulate price increase if that indeed could happen. For the millers, even though the Department of Agriculture is on their side of agreement, seems to be simplifying the facts. There is a great difference from the predicted prices of the bakers from the millers. From a P37 compared to a centavo change, which is more believable? The greater question is: How did they come up with such data?
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By: Bamba, Canovas, Lee, Pascual