Salt producers in quandary over bumper harvest

During these days, salt producers in south-central provinces are in the doldrums due to a sharp decline in salt prices on the heels of a good harvest. Meanwhile, the Ministry of Agriculture and Rural Development (MARD)’s proposal to import an additional 260,000 tonnes of salt has posed a difficult dilemma for salt workers.

In face of the situation, the Ministry of Industry and Trade (MoIT) has decided to halt granting salt import quotas to businesses in 2010 and asked them to use domestically made salt. The timely decision is considered a lifeboat for thousands of salt producers who are facing difficulties because of slumping prices.

“ Bitter” salt

The continuous drop in salt prices has forced salt producers to sell at a loss for fear of even cheaper prices after harvest. They claim that the price of salt in the early harvest is hitting a five-year record low.

Huynh Van Tan from Niem Hoa district, the central province of Khanh Hoa said that since the lunar New Year festival, the price of unrefined salt has dropped from VND 900,000/tonne in late 2009 to VND290,000/tonne. Despite cheap selling prices, salt producers have still sold their products at a loss.

Not only salt workers but also salt making businesses in Khanh Hoa are seeing no way of controlling falling prices.

Le Huu Phai, Deputy Director of the Ninh Diem Salt Cooperative said his cooperative’s salt was sold at VND1.4 million/tonne in 2009. Even though the price has been reduced by one third, buyers still show no interest.

For the Khanh Hoa Salt Joint Stock Company, which accounts for 60 percent of the province’s annual salt output, the current salt price remains at VND900,000/ tonne.

Similarly, the prices of salt in Bac Lieu province, which provides the domestic markets with approximately 100,000 tonnes of different kinds of salt every year, have fallen by half since the early crops. White salt is currently priced from VND900-1,100/ kg while the price of black salt ranges from VND300-500/kg.

In Ninh Thuan province, two years ago, the price of salt hit a record high of VND1.5 million/ tonnes but now the price has dropped to VND450,000-500,000/ tonne.

Dang Van, a veteran salt producer in Ninh Hai district, said that at the current falling prices, salt producers will suffer big losses.

Tran Huu Nhan, head of the Agriculture Department of Ninh Hai district, Ninh Thuan province says salt making was considered a career “sunning water to take gold”. The golden time was end. Now the people of Ninh Thuan do not know to make a living from their salty soil apart from salt making. They are very worried about their lives because of the increasing prices of every commodity.

Mai Ly who works for the Ninh Diem Salt Co-operative says that her family’s daily income dropped from VND70,000 to VND30,000 so she must be very thrifty in her spending.

Striving to contain price hike

Phan Minh Quang, vice director of the Bac Lieu province Department of Agriculture and Rural Development, says that the decline in salt prices is due to cheap Indian salt imported by Vietnam. Many traders mix domestic and Indian salt to gain higher profits.

In addition, the information that the Ministry of Industry and Trade will import 170,000 out of 260,000 tonnes of salt in March affected prices on the domestic market. Traders pressure salt makers to sell at cheaper prices while major consumers are holding off on buying. To sell salt, independent producers cut prices, causing a sharp decline across the market. Therefore, the Ninh Hoa Cooperative is striving to keep the price at VND500,000 per tonne.

Mr Quang says that the province has 3,400 ha of salt, yielding more than 71,000 tonnes. However, 70 percent of salt is currently in local people’s stock.

To minimize the risks for salt workers, the Government should form a stable ceiling price to help workers and salt producers become less dependent on the market, says Le Huu Khai, vice chairman of the Ninh Diem Co-operative. The salt industry will find it difficult to stay firm without a stable ceiling price and specific development strategy.

Tags: Vietnam salt, Vietnam Salt producers