Antidumping committee looks into imports
JAKARTA (JP): The Indonesian Antidumping Committee (KADI), which is looking into allegations of dumping practices by wheat flour producers from Europe, Australia and the United Arab Emirates, is expected to issue a ruling in three months.
KADI secretary Muchtar said if the claims were proven, the government would slap countervailing duties on imports from these countries, Antara reported on Friday.
The size of duty, currently set at zero, will equal the difference between the domestic price and the export price of flour in the country of origin.
"It will be set higher if foreign companies do not cooperate with the investigation," Muchtar said.
According to Franciscus Welirang, director of PT ISM Bogasari Flour Mills, Australian producers sell their wheat flour at US$277 per metric ton on their domestic market and at $179 for export.
Belgians sell theirs at $194 at home and $156 for exports, the French sell theirs for $192 at home against $156 for export, Germans at $197 on the domestic market and $147 for export. UAE producers sell theirs at $230 domestically and at $169 for export.
"Producers in Europe, Australia and the United Arab Emirates sell their wheat flour to Indonesia at prices much lower than their domestic prices," Franciscus said.
Indonesia's wheat flour industry is dominated by Bogasari with a production capacity of 3.6 million metric tons a year from its two mills in Jakarta and Surabaya, East Java.
Other producers are PT Panganmas Inti Persada Flour Mills in Cilacap, Central Java, with 300,000 tons a year, PT Berdikari Sari Utama Flour Mills in Makassar, South Sulawesi, with 400,000 tons and PT Sriboga Ratu Raya Flour Mills in Semarang, Central Java, with 400,000 tons.
Indonesia relies on imports to meet its wheat flour demand.
Franciscus said that since the government deregulated the domestic wheat flour market by setting a zero import duty in 1998, importers' market share rose steadily from 1 percent in the third quarter of 1998 to 16 percent in the third quarter of last year.
Monthly imports grew from 3,415 tons in October 1998, to a peak of 58,097 tons in September, before falling to 36,859 tons in October.
He pointed out that Indonesia's Southeast Asian neighbors restrict imports of wheat flour. Vietnam and Thailand impose a 25 percent import duty, the Philippines impose 10 percent and Malaysia has a tight control over its market.
Franciscus said Bogasari would able to face the competition, but this was not the case with smaller scale businesses.
"We are not afraid of the competition, but the competition has to be fair," he said.
Alwin Arifin of Sriboga said dumping practices could force smaller producers to shut down and create unemployment. They would also have difficulty settling their debts, he added.
KADI announced last week that it had found strong indications of dumping practices and was now looking into the matter.
The committee has sent questionnaires to eight companies from the European Union, Australia and the United Arab Emirates and to 12 Indonesian importers as part of the investigation.
Franciscus and Alwin were joined in the Friday news conference by Agus Irawan, director of Panganmas, and Haryono Mardi, director of Berdikari. (10)