Local flour millers hit collusion claim

Philippine flour millers on Friday countered allegations of profiteering and collusion made against the industry, stressing that prices of local flour remained “reasonable and fair as these reflect market conditions.”

The Philippine Association of Flour Millers (Pafmil) issued the statement amid the ongoing probe by the Department of Trade and Industry, and calls to bring down the prices of flour to reflect the decline in global wheat prices.

The DTI, for one, believes that prices of flour can be reduced by about P45 to as much as P110 per 25-kilogram bag, while the Philippine Baking Industry Group (PhilBaking) pointed out that the Philippines continued to have the highest flour prices in the Association of Southeast Asian Nations at about P850 to P900 a bag.

“Locally milled flour are mostly from high quality wheat from the United States where the Philippines sources some 95 percent of its milling wheat imports. Fact is, the Philippines has the best bread flour in the Asean region,” Pafmil explained.

“To compare Philippine flour quality and prices with those coming from Asean countries and Turkey would be comparing apples to oranges. They just do not match and the comparison is unfair to Philippine flour,” it added.

According to Pafmil, Indonesia, Thailand, Vietnam and other Asean countries consume more noodles than bread. Their flour is thus more suited for noodle making and flour for this purpose is the soft variety which is cheaper than Philippine bread flour.

Philippine bread flour prices, meanwhile, stand at about P750-P920 per bag.

Philippine bread flour, the group further explained, is more expensive than soft flour due to the higher protein content of bread flour at 14 percent compared to maximum of 10.5 percent protein for soft flour. Protein is required for bread to rise to the volume and softness Philippine consumers prefer.

Flour meanwhile from Indonesia, Vietnam and other Asean countries are imported into the Philippines duty free and are sold at prices lower than locally-milled flour.

Most of these imports are of the soft flour variety, it added.

“There is free enterprise in the wheat flour industry and any bakery may buy from any mill or flour dealer any type of flour they prefer, including imported flour. If the Philbaking group believes they can use imported flour for their bread products and that these would satisfy their product requirements, that decision is entirely up to them,” Pafmil said.