Zero-tariff on wheat failed to lower bread prices – millers

The executive director of a flour millers’ group on Thursday asked the government to reinstate the 3-percent tariff on imported wheat, after President Benigno Aquino’s zero-tariff order in January supposedly failed to lower bread prices. President Aquino last month signed an executive order (EO) reducing to zero the import duty on milling wheat – following in the footsteps of his predecessor, now Pampanga 2nd District Rep. Gloria Macapagal-Arroyo, who signed a similar executive order in February 2010. Her order expired in August last year. Aquino’s EO 21 said the zero-tariff “would support efforts to lower the cost of producing wheat flour, which would help stabilize prices of bread." Ric Pinca, executive director of the Philippine Association of Flour Millers, told reporters that the EO has failed to achieve its objectives. “The savings are not passed to consumers in the form of lower price of bread," he said. Less than a week after Aquino signed EO 21, Trade Undersecretary Zenaida Maglaya said the government expected the EO to bring down flour prices by P20 per sack. Maglaya, however, also cited reports of a potential rise in wheat prices due to higher prices of the commodity in the world market. Since the cost of wheat in the world market has more than doubled in a span of seven months, Pinca said the tariff reduction from 3 to zero percent had so far little impact. “What the government can do is to review the food security policy and develop self-sufficiency in commodities that we are capable of producing," he said. According to Pinca, the scarcity of milling wheat in the world market may even pull up the prices of wheat flour by a minimum P50 per 25-kilogram bag. Events associated with climate change – the drought in Russia, the floods in Australia, and the frost in Canada – have contributed to lower wheat production worldwide. The United States remains the only viable supplier of wheat, but US prices have also jumped to $9.20 per bushel from $4.80 in June last year. Pinca had also said the government should raise flour tariffs to stop the “unabated entry of subsidized competition." “It is disrupting the local industry. It reduces the consumption of local flour," he said. Pinca’s group will file a petition for a tariff hike within the first quarter of the year. — With Paterno Esmaquel II/VS, GMA News