Salt farmers incur loss as demand miscalculated

The Ministry of Industries has been setting the country's annual demand for salt at much less than its actual use, leaving a grey area for import of finished salt by industries through mis-declaration, salt farmers and millers allege.

The difference between the official estimate of demand and millers' assumption about actual use is not small – the gap is a surprising several few lakh tonnes.

Millers and salt farmers allege that exploiting the huge gap, the cooking essential is being imported for industrial use through mis-declaration and then sold as table salt at a lower price, causing substantial damage to local salt farmers and refiners.

The issue was discussed at an industries ministry meeting recently, and subsequently a committee was formed to look into the matter.

Under the ministry, the Bangladesh Small and Cottage Industries Corporation (Bscic) looks after the local salt industry and formulates the salt policy. At the meeting, the local salt industry people concerned complained that the salt policy has been formulated, for quite a long time, showing demand as less than actual use.

According to the draft of the Bscic salt policy for the next five years, the country will consume 19.43 lakh tonnes of salt in the current fiscal year. But the salt mill owners' association at the industries ministry meeting claims that the actual demand in the 2020-21 fiscal year is not less than 28 lakh tonnes. The gap between the claim and Bscic's estimation is around 10 lakh tonnes.

The state-run Trade and Tariff Commission also supports the millers' claim by attributing that the demand in 2020-21 FY will be around 28 million tonnes.

When contacted, Additional Secretary (Bscic) to the industries ministry Kazi Sakhawat Hossain told The Business Standard (TBS) that the technical committee they had formed would collect information after talking to all concerned.

"We will finalise the salt policy based on that information," he added.

Asked if Bscic lacks the capacity or willingness to determine actual demand, he said, "There are always some institutional complications. For this reason, perhaps no separate study on salt demand has been conducted so far. But there is no lack in Bscic's capacity."

In the meantime, Bangladesh Salt Mill Owners' Association President Nurul Kabir told TBS that many people are selling salt on the local market after importing the item in the industrial category.

"The Bscic knows this but does not take any action to stop it," he added.

According to the millers, imported industrial salt costs Tk12-14 per kilogramme to hit the local market while local salt production costs Tk20 per kilogramme.

ACI Salt Business Director Quamrul Hassan told TBS that when there is a gap between salt policy estimation and actual salt use, the market reflects a crisis. If a crisis does not appear, it should be assumed that salt is being imported and sold on the market for other purposes.

Estimations in the salt policy

Calculating per person salt consumption at 14.5 grams per day, the Ministry of Industries has projected the demand of 9.08 lakh tonnes of table salt for 17 crore people in the current financial year.

There are also estimates of the need for about: 4.80 lakh tonnes of salt for industrial use, 2.83 lakh tonnes for caustic soda making, 2.71 lakh tonnes for animal resources development, and 0.012 lakh tonnes for fish processing.

The ministry said the total demand is 19.43 lakh tonnes – comprising edible salt consumption and industrial use.

But the salt mill owners' association said the demands for edible salt and industrial salt amount to 24 lakh tonnes. In addition, four lakh tonnes of salt is needed for making caustic soda.

The Trade and Tariff Commission also agrees with the calculation. It in a recent study said the actual salt demand is about 28 lakh tonnes.

The commission recommended that the ministry take into account the use of salt for edible purposes, fish processing, livestock, and industries to calculate actual total demand.

Assistant Chief of the commission Mahmudul Hasan, at the industries ministry meeting, said "The use of table salt in food processing has increased manifold. Besides, many factories use salt in effluent treatment plants to treat wastewater."

Local salt farmers and factory owners have demanded that the government monitor industrial salt imports closely. They said without strict central supervision, sales of imported industrial salt as table salt will not stop.

The Salt Mill Owners' Association complained to Bscic that at least 20 lakh tonnes of finished salt was imported in the 2018-19 fiscal year, and a huge portion of it was sold on the market as table salt.

According to the government's estimation, the country eats away nine lakh tonnes of salt while local salt producers manufactured 13 lakh tonnes of salt last fiscal year.

Though the country's production of table salt is more than demand, mill owners said sales of locally produced table salt fell sharply due to imported salt. Both the amount of land for salt cultivation and production have continuously decreased.

Khalilur Rahman, convener of the ministry-formed technical committee and also Bscic director, said they are collecting information on salt demand so that imported salt for industrial use does not hurt the domestic salt industry.

He said the committee has sought the cooperation of the Bangladesh Trade and Tariff Commission in this regard.