ASEAN KEY DESTINATIONS
Govt may impose salt import ban to back farmers
The government has issued an ultimatum to salt traders and import-reliant industries, saying it will not grant any import permits unless there is a show of “good will” to support efforts to achieve self-sufficiency in industrial-grade salt by 2016.
State officials are urging the business community to commit to purchasing a portion of their consumption needs from local salt farmers, as the government aims to empower the latter to meet at least 50 percent of industry demand this year, with the remaining 50 percent to be achieved next year.
Sudirman Saad, the Maritime Affairs and Fisheries Ministry’s director general for marine, coastal and small island affairs, said that preliminary discussions with the private sector had resulted in a stalemate, prompting the government to resort to hardball tactics to further the agenda.
“After the discussion, many considered the self-sufficiency target difficult to achieve. But 50 percent must be reached this year so we can slash the quota for salt imports,” Sudirman told reporters after a focus group discussion with Maritime Affairs and Fisheries Minister Susi Pudjiastuti, last Friday.
Sudirman said that the minister expected businesses to work together and forge partnerships with local farmers to produce industry salt, or commit to a fixed annual quota that would be sourced from salt farmers at a slightly higher price than imports.
“In return, the state will be responsible for funding improvements in quality, as well as procuring new technology and monitoring progress,” he said.
“But there has to be a show of good will from them; we’ll pen an agreement so that we can avoid the last option of monopolizing imports.”
The government could establish a price ceiling for imported salts. If traders then sold higher, it would freeze all import permits and take over inbound trading through a national consortium comprising PT Garam and salt-harvesting unions, the echelon I official said, adding that the government would maintain fairness.
According to ministry data, imports of industry salt totaled around 2.1 million tons last year, equal to US$105 million. That amount comprises 446,000 tons for the miscellaneous foods industry, 2,100 tons for the pharmaceuticals industry, 1.5 million tons for the chlor alkali plant (CAP) industries — with PT Asahimas Chemical taking up the lion’s share of 800,000 tons — and another 109,000 tons for non-CAP industries like textiles, leatherworks and oil drilling.
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