The Philippines has a very limited production and exports volume of fructose syrup and as such it will not be affected by the decision of Indonesia to slap safeguard duty on the said product.
Senen Perlada, director of the Export Marketing Bureau of the Department of Trade and Industry, said only soda/softdrink manufacturers are producing fructose syrup in the country, but mainly for their own use. Local manufacturers only export if there are excess, if any, it is quite small. The biggest supplier of fructose syrup to Indonesia is China.
In fact, Perlada said the Philippines did not export fructose syrup at all in 2019. In 2018, the Philippine’s export value of total fructose syrup export was $1.59 million, the bulk of which or $1.52 million went to Indonesia. But DTI said the punitive duty will apply to the Philippines being a member of WTO.
Indonesia imposed the safeguard duty based on the request of its local manufacturer PT. Associated British Budi (ABB) to conduct a safeguard investigation on the import surge of fructose syrup. The Indonesian Trade Safeguard Committee (KPPI) presented that the fructose syrup production of the applicant was 54 percent of the total domestic production.
ABB argued that the Indonesian market was flooded with cheap imports of fructose syrup from China, citing an increase on its importation from 2015-2018 based on the data from the Indonesian Central Bureau of Statistics (BPS).
KPPI submitted a notification to the World Trade Organization (WTO) Committee on Safeguards last 13 November 2019 and they requested all interested Parties to submit comments through a formal letter by 15 December 2019.
KPPI reported that during the investigation period, the importation of fructose syrup had absolutely increased and battered the applicant’s market share. This caused the applicant to suffer serious losses as the increase in the import share had dominated the local market. It had also decreased all performance indicators namely, domestic sales, production, productivity, use capacity, operating profit/loss, and manpower.
KPPI recommended to impose safeguard import duty (BMTP) on imports of “fructose syrup, in dry condition, contains fructose more than 50 percent by weight, excluding invert sugar.”
BMTP’s imposition was proposed for three years.
On the first year, Indonesia is implementing a 24 percent duty down to 22 percent on the second year and 20 percent on the final year.