Smuggling threatens flour millers' business

Smuggling is threatening the surge in demand for flour during the first six months of the year on election-related consumption, the Philippine Association of Flour Millers (PAFMill) said on Sunday. While the association looks forward to a surge in business operations, it is wary of the continuing incidence of flour smuggling in the country. Flour millers were looking at a 10-percent increase in annual wheat arrivals to 2.2 million MT this year from 2 million MT in 2009. “However, the unchecked entry of smuggled flour from Turkey is causing us some problems," association executive director Ric Pinca said. The biggest threat to the industry was the entry of Turkish flour that was misdeclared at $30 per metric ton (MT) when its real value was $300 per MT, Pinca stressed. (See: Group raises red flag on flour imports from Turkey) “No industry in the world can survive with smuggling at this level. Not only is Turkish flour undervalued, the weight is also being misdeclared at half the volume," he said. “Collusion among importers, brokers and even Custom officials and employees makes it hard for us to combat smuggling." Pinca said. There would be a meeting in Malacañang this week to discuss the current state of smuggling in the country. “There is going to be a review of smuggling cases. We certainly hope this will lead to better solution to this long standing problem," he said. The volume of wheat imported by millers grew by 9 percent to 544,042 metric tons (MT) in the first quarter from a year earlier, PAFMill said. “There was increased demand for bakery products, like breads, possibly because of the election period," Pinca said. The association expects that flour consumption for the first six months will rise on election-related consumption. “If there is an increase in flour consumption, it only follows that there should be a corresponding increase in the milling wheat and flour wheat importation," according to Pinca. Last year, Philippine flour millers imported 64,000 MT from Turkey, 10,000 MT from Australia, 5,000 MT from Vietnam, and 4,000 MT from Russia. The millers also imported 30,000 MT from Singapore, Italy, Ukraine, Taiwan, Thailand, and Hungary. Imported wheat for animal feeds and food processing steadily rose in the last two years, from 1.92 million MT in 2008 to 2 million MT in 2009. -- VS/OMG, GMANews.TV