Trade official: Garlic prices manipulated

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Thursday, July 3, 2014

PRICE manipulation is exactly the problem.

Trade and Industry Undersecretary for Consumer Welfare and Business Regulation Group and head of the National Price Coordinating Council Secretariat Victorio Mario Dimagiba confirmed during the hearing of the Senate committee on agriculture and food.

"The supply chain is very long to cause a huge increase on the retail price," Dimagiba told senators as he maintained that the government is doing everything to protect consumers.

Senator Cynthia Villar, committee chairperson, said they will dig deeper into the issue as she explained that this will affect prices of other commodities and services.

Senator Grace Poe, who is vice chairperson of the committee, said the government should immediately implement a price freeze on garlic, as market prices of the prime commodity have increased at alarming proportions.

It was gathered during the hearing that traders earn as much as 900 percent on sales of imported garlic, as the landed cost of garlic from China costs only P17 per kilo, including duties.

"Do we have an agency that automatically implements a price freeze or moratorium on price spikes if it has been found that there is unreasonably high spikes in basic commodities?" Poe asked.

It was also revealed during the hearing the surge in prices of garlic have been noted and was being monitored by proper government agencies as well as the existing market prices of the produce ranged, which is from P280 to P350 per kilo.

"What is the tolerance level: 10, 50 or 100 percent? We have to know, otherwise, we are not effectively doing our jobs," Poe questioned.

"If we have to call for a hearing each time there is a price increase, by the time we control and stop the abuse, it might have already created so much damage for the consumers. So, we have to be able to look into this, not to discourage potential investors and free market but at least to stem or stop abuse. Nine hundred percent profit is certainly obscene," she said.

Dimagiba admitted that there is no suggested retail price yet for garlic, while Agriculture Undersecretary Emerson Palad said a technical working group is looking into the situation.

Under Republic Act 7581 or the Price Act of 1992, as amended, implementing agencies such as the Department of Agriculture (DA) may determine, recommend to the President and enforce price ceiling or control if there is "prevalence or widespread acts of illegal price manipulation, the impendency, existence, or effect of any event causes artificial and unreasonable increase in the price of the basic necessity or prime commodity and whenever the prevailing price of any basic necessity or prime commodity has risen to unreasonable levels."

Poe, for her part, said the government must also provide lasting solutions to help local farmers, including farmers' cooperatives.

She also asked the DA and local cooperatives to provide a list of traders to punish hoarders and price manipulators.

Meanwhile, Senator Paolo Benigno "Bam" Aquino attributed the high prices of rice, garlic and onions and other goods in the market to the delays in the delivery of shipment due to the heavy congestion at the Manila Port.

"Businesses are affected by delays in the delivery of their shipment, forcing them to increase prices to recoup losses. The increase will then be shouldered by the helpless consumers," the senator said.

The senator called on the administration of the Manila Port, local government of Manila, Department of Trade and Industry (DTI) and other stakeholders to find a "win-win" solution that will address supply problem, reduce prices of commodities and solve the perennial traffic problem, all at the same time.

"I believe that all of our major problems are addressed when stakeholders gather together to solve it," said Aquino.

Aquino said stakeholders should consider using other ports, such as the Port of Batangas, Subic and Davao, as alternative unloading points for cargo and shipments to decongest the Port of Manila.

"If the cargo is headed to Pangasinan or La Union, it would be wise to have it unloaded in Subic. This way, time and money will be saved," Aquino said.

"If these cargoes are diverted to other ports, the number of trucks roaming around Manila will be reduced, resulting to better traffic conditions. It will be a win-win solution for everybody," Aquino said.

The Port of Manila has been experiencing congestion and logistical problems, which has resulted in higher prices of goods in different parts of the country, according to Senator Aquino.

"The Manila Port has had logistical nightmares recently and thus, delay in the delivery of goods and services to the provinces," said Aquino, chairman of the Senate committee on trade, commerce and entrepreneurship.

Aquino said he received reports of shortage in medical equipment such as dental needles and anaesthetics in Mindanao due to the slow movement of shipments from Manila.

"The prices of dental needles went up from P600 to almost P2,000. Even if you have the money, still you cannot find one in drugstores and other medical companies because of delay in arrival of supplies from Manila," Aquino said.

Logistical problem has also affected the manufacturing sector due to the late arrival of needed raw materials, hampering their production and delivery schedule. (Camille P. Balagtas/Sunnex)

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