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KPPU suggests change to Indonesia's salt trade system

Christian Fernsby |
KPPU has suggested that the Government make a change to the industrial salt import trade system for short-term in order to prevent the abuse of market power from occurring by salt importers; and make a more precise accuracy of the salt balance so that domestic salt absorption can further be optimized.

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Topics: INDONESIA    SALT    TRADE   

Such suggestion was conveyed by the Chairman of the KPPU to the Coordinating Minister for the Economy and the Coordinating Minister for Maritime Affairs on October 28, 2019.

The purpose of the said statement was to respond to information in various media regarding the planned importation of industrial salts of 2.92 million tons.

This has become a center of attention because the quality of local salts is deemed by industrialists as not yet in line with the specifications of the industrial needs, namely salts with a Sodium Chloride (NaCl) content of above 97%.

KPPU itself had assessed the policy on industrial salts in 2010 in order to follow up the Decision of the KPPU on Case Number 09/KPPUI/2018 regarding Alleged Violation of Article 11 of Law Number 5 Year 1999 in the Trade of Industrial Salts for Various Foods in Indonesia, and identified that the policy on industrial salts had very much distorted the working of a fair business competition in this industry.

KPPU has delved deeply into the characteristics of industrial salts and the underlying policy in the said assessment.

One of the big problems facing the industrial salts at the moment is the abundance of products in 2019, but only a part was absorbed by the market.

User industries deem the salts of farmers as not meeting the set standards.

This condition has become an irony because imports in a huge amount are conducted in the midst of abundant supply of salts of farmers.

To date, it seems that there is almost no solution for problem solving efforts so that the salts of farmers can meet market needs and become the substitution for the imported salts.

The news on the increased amount of imports of 6% in 2020 describes the said condition.

This condition keeps on putting pressure on farmer salts.

The price of farmer salts goes down to IDR150/kg.

One of the classic problems arising is that the condition of abundant imported industrial salts also penetrates edible salts in the midst of the magnitude of farmer salts not absorbed by the market.

The low price of farmer salts which is merely worth IDR150/kg has further become an irony because the retail price of edible salts at the retailers is above IDR10,000/kg.


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