CASE STUDY

"Price of Pinoy Tasty Seen to go up"

The price of pinoy tasty (sliced loaf of bread made of cheaper

flour) may go up by 10 to 15 percent effective this month due to higher cost of

flour.

Bakers said this yesterday ahead of the anticipated announcement

today of the Department of Trade and Industry (DTI) on the possible impact of

the impositions by the Department of Agriculture (DA) of higher tariffs on

Turkish flour, which is used in Pinoy Tasty.

Currently priced at P37 per 450 grams loaf, the Pinoy Tasty

could hover near P40 per loaf, bakers said.

According to the bakers, supply of the Turkish flour is quickly

vanishing following the announcement last Monday of DA Secretary Proceso Alcala

that he would recommend the imposition of a 20 percent duty on flour coming

from Turkey.

The source said they have yet to get a copy of the

administrative order that would put in effect the higher duty on the product.

But presidential spokesman Edwin Lacierda did confirm that there

is a pending hike of Pinoy tasty and Pinoy Pandesal but assured the public that

their prices would remain at their current levels for now, pending a review of

the proposed new rates by the DTI.

Lacierda also assured that other bread products are not covered

by the proposed increase.

The bakers said the 10 to 15 percent increase is based on a

formula of major ingredients, the biggest component of which is flour. They

said they were able to justify the increase with the DTI.

The bakers met with the DTI secretary Gregory Domingo last

Tuesday.

Bakers said they buy locally milled flour P880 to P900 per

25-kilogram bag but Turkish flour remains cheap at P720.

The bakers also told the National Coordinating council two weeks

ago that they do not have an alternative for Turkish flour since the locally

milled cheaper variant " Harinang Pinoy" does not meet their

standards.

The Philippine Association of Flour Millers (PAFMIL) has

petitions with the DA the imposition of anti-dumping duties against Turkish

flour.

Based on its petition, PAFMIL said the average price of Turkish

flour is 2010 was $276 per metric ton which its domestic price was $600.

The following year, the expert price was at an average of $388

per mt against $600 per mt in Turkey. Last year, the average export price was

down to $479 per mt.

PAFMIL claims that exports of Turkish flour to the Philippines

grew 16 percent in 2011 and by 71 percent last year. This is in contrast with

the growth of the local flour milling industry of 1 to2 percent per year.

Meanwhile, Lacierda said, the DTI Director Vic Zeny Maglaya, met

with the different millers and bakers association in the country following

reports of a pending price increase in bread after the Department of

Agriculture proposed a tariff hike on imported flour from the current 7 percent

to 20 percent.

Question:

1. Viewpoint?

2. Time Context ?

3. Problem Statement ?

4. Statement of the Objective?

5. Alternative Courses of Action?

6. Analysis ?

7. Conclusion/Recommendation?

8. Plan of Action?