THE Department of Trade and Industry (DTI) has been closely monitoring the declining trend in world market price of wheat since June 2011 based on the Minneapolis Grain Exchange (MGEX) data.
The DTI now takes note that despite this declining trend in world market price of wheat, the monitored retail prices of local brands of flour, instant noodles, and bread do not reflect such decline, which could have been part of their raw material costs.
These observations have prompted the DTI to look into why the prices of flour, instant noodles, and bread in the local market are not decreasing.
DTI-Consumer Protection Group Undersecretary Victorio Mario A. Dimagiba explains, “When prices move up or down in the world market, retail prices in the domestic marketplace naturally move with it.”
“With sharp declines in the world market price of wheat, we were expecting lower retail prices for flour which in turn, results to lower prices of bread and noodles. However, based on our regular monitoring, prices of said commodities are not going down.
“As such, we cannot help but wonder if some form of ‘teaming up’ is happening within the industry, which can be influencing the current situation.”
Confirming DTI’s observation on the decreasing world price behavior is the latest National Economic and Development Authority (Neda) report that the value of importation of raw materials decreased by 6.2 percent which can be attributed to the declining prices of raw materials in the world market.
“Considering the decline in world prices, the DTI computation reveals that the retail prices of flour should be P715 to P839 per 25kg bag for Class I flour; P732 to P825 per 25kg bag for Class II flour; and P800 to P845 per 25kg bag for premium flour.
To further its probing, the DTI has coordinated with the Bureau of Customs and requested for the flour millers’ 2014 import documents, which include import entry declaration, Bill of Lading, and commercial invoice.
In addition to these letters, the DTI has undertaken another course of action to ensure that prices of goods, particularly flour, noodles, and bread are sold at reasonable prices that are reflective of world market price behavior.
“The National Bureau of Investigation (NBI) is already investigating possible cases of profiteering involving two big flour millers in the country for relentlessly maintaining high prices over the past three-and-a-half years,” Dimagiba underscored.
The DTI’s price monitoring reports show that these big flour millers, despite the decline in prices of wheat in the world market, are constantly selling their flour bags at P930-P940, which is significantly higher than the prevailing price of P900.
Undersecretary Dimagiba added, “We also requested the NBI to expand its investigation and include all flour millers and bakers in the possible cases of profiteering.”
Prior to seeking NBI’s assistance, the DTI has already been coordinating with manufacturers of basic and prime goods since the start of the year to request a review and possible decrease in prices. Milk and coffee manufacturers heeded to this request but the rest remained adamant.-pna
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