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Homework answers / question archive / 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

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

Economics

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 (DTI) on the possible impact of

the impositions by the Department of Agriculture (DA) of higher tariffs on

Turkish flour, which is used in Pinoy Tasty.

Currently priced at P37 per 450 grams loaf, the Pinoy Tasty

could hover near P40 per loaf, bakers said.

According to the bakers, supply of the Turkish flour is quickly

vanishing following the announcement last Monday of DA Secretary Proceso Alcala

that he would recommend the imposition of a 20 percent duty on flour coming

from Turkey.

The source 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 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 proposed 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 the DTI secretary Gregory Domingo last

Tuesday.

Bakers said they buy locally milled flour P880 to P900 per

25-kilogram bag but Turkish flour remains cheap at P720.

The bakers also told the National 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

petitions with the DA the imposition of anti-dumping duties against Turkish

flour.

Based on its petition, PAFMIL said the average price of Turkish

flour is 2010 was $276 per metric ton which its domestic price was $600.

The following year, the expert price was at an average of $388

per mt against $600 per mt in Turkey. Last year, the average export price was

down to $479 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 to2 percent per year.

Meanwhile, Lacierda said, the DTI Director Vic Zeny Maglaya, met

with the different millers and bakers association in the country following

reports of a pending price increase in bread after the Department of

Agriculture proposed a tariff hike on imported flour from the current 7 percent

to 20 percent.

Question:

1. Viewpoint?

2. Time Context ?

3. Problem Statement ?

4. Statement of the Objective?

5. Alternative Courses of Action?

6. Analysis ?

7. Conclusion/Recommendation?

8. Plan of Action?

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The case study presented in the question essentially highlights the possible economic impact of the imposition of a higher tariff by the Department of Agriculture(DOA) under the government of Phillipines on the import of Turkish flour on the price of Pinoy tasty in the Philippines. A potential or possible imposition of tariff on the import of Turkish flour by the Philippines government would lead to an increase in the price of imported Turkish flour, which is an essential ingredient or raw material used for the production of the Pinoy tasty in the Philippines thereby causing concern for the local producers and sellers of Pinoy tasty in the Phillipines. As a consequence, the price of the Pinoy tasty is also expected to rise as the price transmission effect of an increase in tariff by DOA on Turkish flour import. As pointed by the presidential spokesperson and various Millers Association, the pending tariff increase on Turkish flour import by the Philippines could have an adverse economic impact on the price of the local Pinoy tasty bread which would have an undesirable economic welfare impact on the local consumes of the tasty bread in the local or domestic market in the country. However, the expected timeline of the tariff increase or hike in import duty has not been clearly specified by the government officials which raises further concerns regarding the specific timeline of the possible price hike of the tasty bread in the local Phillipino market. As mentioned by the Philippine Association of Flour Millers (PAFMIL), the overall export of Turkish flour has increased substantially since 2011 and the export price of the flour has decreased during the last year.

Therefore, in light of the main content and overview of the case study presented in the question, the main research or empirical issue or problem would be the adverse or undesirable economic impact or consequence of a possible increase in the tariff on Turkish flour import on the price of the Pinoy tasty in the domestic or local market in the Philippines. Now, in this regard, based on the main economic issue or problem highlighted or pointed out in the case study, the primary or main empirical or research objective would be to analyze or assess the potential economic impact of a possible increase in the tariff by the Philippine government on Turkish flour import on the price of the Pinoy tasty bread in the domestic or local market in Philippines.

Now, on the basis of an empirical analysis on the economic impact of a tariff increase on the import of Turkish flour by the Phillipine government on the price of the Pinoy tasty in the country, the alternative courses of actions could essentially refer to the alternative measures or policies to the imposition of a tariff increase on Turkish flours that the government of Philippines or the DOA can implement in order to prevent any possible price hike of the Pnoy tasty bread or products in Phillipines and at the same time appropriately address the economic interests and welfare of the local flour producers and manufacturers in the county. Therefore, the alternative measures or policies by the government would be mainly intended to provide or ensure an optimal economic solution that would raise or maximize the economic welfare of all the concerned economic agents or entities, in this instance. As the conclusion of the empirical or research analysis, some of these alternative policies or measures can be explored in further detail and stated as recommended alternatives to the proposed tariff increase on the import of Turkish flour by the country. These alternative recommendations or possible policy measures again should be based on a thorough empirical or research analysis on the concerned topic and the economic welfare impacts on all the concerned economic entities or agents involved in the concerned matter or issue presented in the case study.

The research or empirical analysis of the economic impact of the tariff increase by DOA or the government of Phillipines would expectedly involve a thorough and comprehensive empirical research procedure or method including data or information collection on the research problem or issue, proper and adequate organization and analysis of the data or information collected, employing various appropriate data analysis methods or approach, evaluating the research or empirical findings or results of the research, and recommending appropriate and relevant alternative policy measures by the government that would generate economically optimal outcomes, in this context. Thus, the overall empirical analysis needs to follow a definite and systematic plan of action or a research plan that would lead to empirically valid research outcomes and results. This is an extremely imperative step of the research process which could determine the validity of the research estimations and results that could potentially determine the planning and effectiveness of any alternative policies that can be undertaken by the government in this instance with the main objective to prevent any undesirable economic welfare impact of a tariff increase on Turkish flour import on the domestic Pinoy tasty market in Philipines.