February 8: Rising prices and concerns over lower tariffs for imported finished products will likely keep the Philippine grains market subdued next week, traders said. "We are in a terrible situation," one senior trader said."Prices are going up for soybeans. Wheat grain prices are still higher than where they were three weeks ago and the peso is depreciating. These do not give us a good prognosis of what's in the future."
A senior trader says, ``Prices have not come down. I don't think anybody who's suing a tender will necessarily buy."
The effects of high prices and a weakening peso have been exacerbated by concerns on tariff rates, traders said. The Philippine Association of Flour Millers Inc (Pafmil) is opposing a tariff cut for imported wheat flour to 10 per cent from 20 per cent. "The government, which could have helped the local industry through lower duty on our raw materials, instead chose to lower the duty on imported competition," president of Pafmil, Felix Maramba said in a letter to theNational Economic and Development Authority.
The duty for wheat, the raw material for flour, stands at 10 per cent. "We hope the government will rectify this error by reverting to the old tariff structure on wheat flour," Maramba wrote.
At a 10 per cent duty, imported flour costs 370 pesos per 25-kilos, less than the retail price of local flour which ranges from 375 pesos to 400 pesos.
"It's like a double whammy. We are already hurting from the peso situation and the lower tariff for imported products is the final nail in our coffin," one executive of a flour milling company said.
"The industry is in protest." General Milling Corporation has written to Philippine agriculture secretary Salvador Escudero asking him to reconsider the three per cent tariff rate on soybeans and soybean meal, and the 10 per cent rate on soybean oil.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
