Indian salt exports becoming uncompetitive

May 6th, 2008 - 12:48 pm ICT by admin  

By P.S. Anantharaman
Ahmedabad, May 6 (IANS) Indian salt is becoming uncompetitive in the global market due to the rising cost of transport even as Australian exports are on the increase, says an industry representative. “The transport cost has increased. Fuel prices have trebled in the last decade. A hundred percent increase in ship freight and a similar increase in wagon costs in the last two years are rendering Indian salt exports uncompetitive,” said B.C. Raval, secretary of the Indian Salt Manufacturers Association.

“The hike in fuel costs and railway and ship freight in the last two to three years has escalated the cost of salt by almost 40 percent,” Raval told IANS.

He said it was time efforts were made to bring down logistics cost. He suggested increasing the loading rate, that is, the time taken to load a ship. Currently it takes about 10 times more to load about 17,000 tonnes of salt in India than elsewhere.

He said Australia exports on an average around 10 million tonnes of industrial salt, which is equal to 75 percent of its output. India, on the other hand, exports two to three million tonnes of salt a year.

Japan, Vietnam and Bangladesh are the main customers of Indian salt. India is the third largest salt producer in the world after the US and China.

India’s annual salt production is around 17 million tonnes of which five million tonnes is consumed as edible salt. Another 8.5 million tonnes is used by industries as raw material and the balance is exported.

Gujarat accounts for 72 percent of the national output, followed by Rajasthan at 12 to 15 percent, Maharashtra about eight percent and the eastern region about two to five percent.

The salt industry in Gujarat has also been affected by an extended winter and recent out-of-season rains. As a result, the salt output this year is expected to come down to 15 million tonnes from 17 million tonnes in 2007.

According to Raval, the decline in output could further contribute to a rise in salt prices. He estimated that the price could reach Rs.350 to Rs.400 per tonne compared to Rs.250 per tonne that prevailed during 2007.

Any further increase in logistics costs and power charges could further push up the price, he added.

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