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    Case Study Price of Pinoy Tasty Seen To Go Up

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    Maryela Ocares Ducante
    The price of Pinoy Tasty bread is expected to increase by 10-15% due to higher costs of imported Turkish flour from a proposed 20% tariff by the Department of Agriculture. Currently priced at Php37 per loaf, Pinoy Tasty could rise to Php40 per loaf. Local bakers are justified in passing on higher flour costs to consumers. The Philippine Association of Flour Millers has petitioned for anti-dumping duties on cheaper Turkish flour, which has been growing its market share in the Philippines in recent years at the expense of the local milling industry.

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    Case Study Price of Pinoy Tasty Seen To Go Up

    Uploaded by

    Maryela Ocares Ducante
    469 views2 pages
    The price of Pinoy Tasty bread is expected to increase by 10-15% due to higher costs of imported Turkish flour from a proposed 20% tariff by the Department of Agriculture. Currently priced at Php37 per loaf, Pinoy Tasty could rise to Php40 per loaf. Local bakers are justified in passing on higher flour costs to consumers. The Philippine Association of Flour Millers has petitioned for anti-dumping duties on cheaper Turkish flour, which has been growing its market share in the Philippines in recent years at the expense of the local milling industry.

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    Case Study #1

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    The price of Pinoy Tasty bread is expected to increase by 10-15% due to higher costs of imported Turkish flour from a proposed 20% tariff by the Department of Agriculture. Currently priced at Php37 per loaf, Pinoy Tasty could rise to Php40 per loaf. Local bakers are justified in passing on higher flour costs to consumers. The Philippine Association of Flour Millers has petitioned for anti-dumping duties on cheaper Turkish flour, which has been growing its market share in the Philippines in recent years at the expense of the local milling industry.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    469 views2 pages

    Case Study Price of Pinoy Tasty Seen To Go Up

    Uploaded by

    Maryela Ocares Ducante
    The price of Pinoy Tasty bread is expected to increase by 10-15% due to higher costs of imported Turkish flour from a proposed 20% tariff by the Department of Agriculture. Currently priced at Php37 per loaf, Pinoy Tasty could rise to Php40 per loaf. Local bakers are justified in passing on higher flour costs to consumers. The Philippine Association of Flour Millers has petitioned for anti-dumping duties on cheaper Turkish flour, which has been growing its market share in the Philippines in recent years at the expense of the local milling industry.

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    of 2

    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 on the possible impact of the possible imposition by the Department of Agriculture of higher
    tarrifs on Turkish flour, which is used in Pinoy Tasty.

    Currently priced at Php37 per 450-gram loaf, the Pinoy Tasty could hover near Php40 per loaf, bakers
    said.

    According to the bakers, supply of Turkish flour is quickly vanishing following the announcement last
    Monday of Department of Agriculture Secretary Proceso Alcala that he would recommend the
    imposition of a 20-percent duty on flour coming from turkey.

    The sources 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 in the prices 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 propose 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 DTI Secretary Gregory Domingo last Tuesday.

    Bakers said they buy locally milled flour Php880 to Php900 per 25-kilogram bag but Turkish flour remains
    cheap at 720.

    The bakers also told the National Price 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 petition with Department of Agriculture the
    imposition of anti-dumping duties against Turkish flour.

    Based on its petition, the PAFMIL said the average price of Turkish flour in 2010 was $276 per metric ton
    while its domestic price was $600.

    The following year, the export price was at an average of $388 per mt against $600 per mt in Turkey. Last
    year, the average export price was down to $340 per mt but the domestic price was at $470 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 to 2 percent per year.
    Meanwhile, Lacierda said , the DTI Director Vic Dimagiba through Undersecretary Zeny Maglaya, met
    with the different millers and bakers association in the country following reports of a pending prince
    increase in bread after the Department of Agriculture proposed a tariff hike on imported flour from the
    current 7 percent to 20 percent.

    QUESTIONS:

    1. Do you think the demand for Pinoy Pandesal and Pinoy Tasty is elastic? What do you think will
    happen to the demand for pandesal and tasty when prices increase by 15% and by 100%?
    2. What do you think will happen to the supply of pandesal and tasty if the price of locally milled
    flour increases by 15% and by 100%?
    3. What are the substitutes for pandesal and tasty? Do you think the prices of these substitutes
    will likewise increase?
    4. Do you think the government should implement a price ceiling for pandesal and tasty?

    Note: Research on Price Elasticity on Demand and Supply for you to be able to answer the questions.

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