LOCAL FLOUR PRODUCERS SEEK PROTECTION AGAINST IMPORTS

By Andi Abdussalam

Jakarta, Dec 4 (ANTARA) - Indonesian flour producers are seeking protection from the government (in the form of a temporary safeguard duty) because Turkish flour exporters are carrying out dumping practices. Fearing that their businesses could face bankruptcy unless protection is taken, domestic flour producers have taken the issue of dumping practices to the government. According to the local flour producers, Turkish flour exporters have been selling flour at a lower price in Indonesia, as compared to the price of the commodity in its country of origin.          According to Ratna Sari Loppies, executive director of the Indonesian Flour Mills Association (Aptindo), the domestic flour price in Turkey is US$470 per metric tonne. However, the selling price in Indonesia is set at US$340-US$370 per metric tonne. This data has been provided by the US Department of Agriculture.            Therefore, Aptindo has urged the government to protect the local producers from unfair trade practices in the current free trade era. "We do not need incentives but protection in the form of import duties, such as the 20 percent import duty that should be imposed on flour importers," said Ratna Sari Loppies, on Monday.          She said that if the government protects the local producers, Indonesia need not be afraid of the free trade era. Protection will boost the development of local industries, she added.          "Local industries should be protected and developed because they benefit the workers. The development of import businesses will not absorb a lot of workers," she noted.          On November 13, 2012, Indonesia's Trade Minister, Gita Wirjawan, submitted a recommendation on the imposition of a 20 percent provisional import duty on flour imports from Turkey.          However, the Finance Minister, Agus Martowardojo, has not said anything about the recommendation.  He refused to explain if the recommendation made by the trade minister would be signed in the form of a finance ministerial decree.          "Not yet," he said on November 28, 2012.          Earlier, Aptindo proposed an anti-dumping duty which is between 19.67 percent and 20.99 percent, but it was rejected by the finance ministry. The petition was filed by four Aptindo flour producers: PT Panganmas, PT Lumbung Nasional, PT Golden Grand Mill and PT Berkat Indah Gemilang. These producers claimed to have suffered financial losses due to the alleged dumping.          Therefore, Aptindo urged the government to impose the 20 percent provisional import duty on Turkish flour.          Ratna said that the policy will protect small firms from unfair trade practices. She said that only Bogasari, Indonesia's largest flour producer, is able to compete with products that have been imported.          "It is only Bogasari that is able to compete with imported flour, which is sold at a dumping price. If the government does not protect the smaller companies, Bogasari will monopolise the domestic flour business," she said.          Regarding the complaint made by Turkish wheat flour exporters on Indonesia's efforts to impose a temporary safeguard duty on its wheat imports, Ratna said that Turkey should lodge a complaint with the World Trade Organization (WTO).          "Based on business ethics, Turkey should lodge a complaint with the WTO, not with Indonesia. It should not make a fuss and blame the Indonesian government. Indonesia is also affected by an anti-dumping measure imposed by Turkey, but we do not make a fuss because we understand business ethics and its mechanism," Ratna stressed.          By criticising Indonesia, she said that the Turkish Cereals, Pulses, Oil Seeds and Product Exporters Union (TCPOSPEU) is not using the correct mechanism. "If the organisation is not satisfied with Indonesia's decision, they can file a complaint with the Dispute Settlement Body of the WTO," Ratna stated.          They should not make a fuss and be angry at the Indonesian government and at Aptindo. Aptindo's policies have so far been in line with the regulations set by the WTO, she pointed out.          Earlier, the chairman of TCPOSPEU, Turgy Unlu, said that the imposition of a 20 percent provisional safeguard duty on flour imports will allow local wheat producers to monopolise the market.          According to Unlu, there is no country in the world which imposes such duties on flour imports from Turkey. Indonesia is the only country in the world to have imposed such duties.  "Aptindo and a number of local producers are only interested in protecting their own interests, without looking at the interests of Indonesians," he added.          Ratna rejected Unlu's claims that the petition was filed merely because Indonesia's medium-sized flour producers were struggling to compete with large producers, such as PT Bogasari, which controls more than 60 percent of the domestic flour production. "They are struggling because of the dumping practices by Turkish flour producers," she said.          The Turkish exporters are using the lobbying approach to influence certain parties in Indonesia. They are ignoring the WTO mechanism, said Ratna. "They are not aware that they are violating WTO's regulations," she added.          The Indonesian government has taken steps to impose a 20 percent tax on wheat flour imports from Turkey, after it had been proven that Turkey had sold its wheat flour exports in Indonesia at dumping prices, harming the growth of the local producers, Ratna explained.          Bachrul Chairi, Chairman of the Indonesian Trade Security Committee (KPPI), said that the surge of imports should not be viewed in a one-year or a two-year time frame, but over a five-year period. "A decline in imports in a one-year period does not mean that local producers will not suffer any damage."      Data from Indonesia's Central Bureau of Statistics Agency (BPS) shows that Indonesia's flour imports from Turkey, in the first quarter of this year, reached 63,267 tonnes.          Turkey is one of the main suppliers, which exports flour to Indonesia. Other major suppliers include Sri Lanka, Ukraine, Belgium and Australia.          According to data compiled by the Turkish Central Anatolia Export Association, Turkey's wheat exports to Indonesia have been on the decline since 2010. Turkey exported 454,768 tonnes of wheat to Indonesia in 2010, and shipments fell to 387,406 tonnes last year.          Last year, Sri Lanka, Ukraine, Belgium and Australia exported 207,790 tonnes, 31,449 tonnes, 22,138 tonnes and 14,906 tonnes of flour to Indonesia respectively.***2*** (T.A014/INE/B003) (T.A014/A/KR-BSR/B003) 04-12-2012 17:56: