JAKARTA, June 18 Indonesia's trade ministry will
propose indefinitely extending a temporary 20 percent emergency
tariff on wheat flour imports, an official said on Tuesday, as
Asia's top importer of the grain looks to protect its expanding
wheat mill industry against subsidised imports.
Indonesia imposed an emergency tariff on wheat flour imports
for 200 days on Dec. 5 to allow the government to complete an
investigation into imports and the impact on domestic mills.
"On June 20 the temporary safeguard duty on wheat flour will
finish and we will recommend it be determined as a definitive
safeguard duty," Bachrul Chairi, director general of foreign
trade at the trade ministry told Reuters.
The proposal will be sent to the Indonesian Finance
Ministry, who will make the final decision, Chairi added.
Turkey is the largest exporter of wheat flour to Indonesia,
accounting for about 60 percent of the country's total imports
of 402,000 tonnes last year, with Sri Lanka making up around 30
Temporary emergency tariffs are allowed under World Trade
Organisation rules if a country can show a threat of serious
damage to its domestic industry from an unexpected flood of
Industry officials in Turkey have said they could bring a
case against Indonesia at the WTO if the import tariff is made
The Indonesian Wheat Flour Mills Association (APTINDO) said
earlier this year that the import tariff may be extended by up
to three years.
The Indonesian government notified the WTO about its plan to
extend the import tariff on June 5, APTINDO Chairman Franciscus
Welirang said on Tuesday, adding that discussions with
governments who opposed the move were ongoing.
Indonesia imports all of its wheat, both unprocessed grains
and flour, which is largely used to make noodles, bread, cakes,
biscuits and convenience snacks.
Wheat imports into Southeast Asia's largest economy were
about 6 million tonnes last year, and the impact of the wheat
flour import tariff coupled with a 6-7 percent annual rise in
demand could see imports rise to 7 million tonnes in 2013,
Australia supplies around 65 percent of Indonesia's imports
of wheat, with Canada and the United States largely making up
By the year-end, the total number of Indonesian wheat mills
will rise by three to 24, with capacity of 8 million tonnes.
(Reporting by Yayat Supriatna; writing by Michael Taylor;
Editing by Michael Perry)