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IMPORTATION OF WHEAT FLOUR IN THE PHILIPPINES

Wheat is a basic food ingredient derived by grinding or mashing the whole grain of wheat. Whole grain is a good source of calcium, iron, fiber, and other minerals like selenium. The amount of wheat traded internationally exceeds that of all other grains. Furthermore, the protein and caloric content of wheat is greater than that of any other food crop. Most wheat is consumed in the form of baked goods, mainly bread; therefore, wheat grains must be milled to produce flour prior to consumption. Wheat is also used as an ingredient in compound feedstuffs, starch production and as a feed stock in ethanol production. [1] Wheat production in the world has been increasing largely due to plant breeding research and improved production technologies since the 1960s. However, since Philippines does not commercially produce wheat , it imports from different wheat producing countries such as the United States which is its largest supplier. As shown in the diagram and table below, theres an intensive increase in the consumption of wheat in the Philippines from year 2010 to 2011.

Source: United States Department of Agriculture

1.

http://www.responsibleagroinvestment.org/sites/responsibleagroinvestment.org/files/FAO_Agbiz%20handbook_Wh eat%20Flour.pdf

Source: United States Department of Agriculture

According to a report penned by Rene Pastor, the Philippines is on track to increase wheat imports by almost 12 percent to 3.8 million metric tons in the 2013, and the bulk of the buying is scheduled to take place during the second half of the year, a top official of the largest flour milling group said. Philippines is on track to increase wheat imports by almost 12 percent to 3.8 million metric tons in the 2013, and the bulk of the buying is scheduled to take place during the second half of the year, a top official of the largest flour milling group said. .According to Ric Pinca, the executive director of the Philippine Association of Flour Millers(PAFMIL), the estimated total of about 3.8 million metric tons (for milling wheat and feed wheat) is attainable. Having been in a superior position in the world wheat flour exports since particularly the year 2005, Turkey imports wheat instead of importing wheat flour, and produces flour from imported wheat. Turkey's wheat flour imports are almost nil. Wheat flour imports amounted to 3,111 tons in 2009, which was the highest quantity of imports of the last decade, 56 tons in 2011, and 94 tons in January-September 2012. In the last decade, Turkey exported the biggest quantity of wheat flour in the years 2005 and 2011. Between the said years, wheat flour exports declined in the years 2006, 2007 and 2008, started to increase from the year 2008 onwards, reaching the peak level of the last decade in the year 2011. The increase that occurred in the unit price of the exports has been the principally important point of the development of Turkey's wheat flour exports within the said

period. This is the element that determines Turkey's strengthening position in the world wheat trade. [2]

It has been reported that the increasing competition caused by offering of cheaper imported flour from Turkey weakened the demand of wheat here in the Philippines. It is said to be 40 percent cheaper than the locally produced flour.

Turkish government employs a complex inward processing scheme that creates disruptive incentives to its milling industry to export flour regardless of price. The fact that the cheapest Turkish flour is much more expensive in Turkey than similar flour Turkey exports to the Philippines, that such export clearly constitutes dumping. Dumping as defined as the act of charging a lower price for the like goods in a foreign market than one charge for the same good in a domestic market for consumption in the home market of the exporter. [3]

INTERNATIONAL TRADE LAW

SUBMITTED TO: ATTY. EVER HIGUIT

SUBMITTED BY: CZARINA CHERIZZE C. MARTINEZ

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