Tariff cut to reflect on flour prices in February

MANILA, Philippines - Local flour prices will continue falling to reflect the soon-to-be-applied zero tariff on wheat by February, an industry leader said. Philippine Association of Flour Millers Executive Director Ricardo M. Pinca said in a phone interview Monday that millers may slash up to P21 from the price of a 25-kilo sack of flour next year, as Executive Order 765, which mandated the tariff cut takes effect this Dec. 21. Flour prices now range from P870 to P900 per sack, Mr. Pinca said. "[The tariff cut] will affect wheat shipments that arrive in January and become flour in February," Mr. Pinca said He added that the price roll-back is certain as long as global wheat prices continue their current downtrend. "We see a more competitive climate next year. [Wheat] importation and [flour] production will probably increase," he said without elaborating. The tariff rate on wheat currently stands at 3%. EO 765 provides that the 0% tariff will remain in place for six months, "subject to further review." Millers have no plans to ask for an extension of the tariff suspension, Mr. Pinca said. "We will just have to reflect the 3% again [after the six-month period ends]," Mr. Pinca said. "Prices won’t become volatile because we know how much the increase will be," he assured. Philippine Baking Industry Group President Simplicio P. Umali, who was not available for comment Monday, had earlier said that bakers would just pass on future reductions in flour costs to consumers through lowered bread prices. — Jessica Anne D. Hermosa, BusinessWorld