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2. Trade ministry lifts restriction on imports of salt.

The trade ministry has announced it has lifted restriction on the import of salt on January 1, 2005 although no recommendation yet from the maritime and fishery minister and the industry minister on the volume allowed to be imported. Reports said that the industry ministry recommended only three of 19 registered importers of industrial salt in 2004. In 2004, the 19 registered importers imported 1.2 million tons of industrial salt with 453,000 tons remaining to be imported.

The maritime and fisheries ministry has not recommended import of table salt. Until now there has been no registered importers of iodized salt seeking license from the ministry. However, three importers have sought license to import industrial salt and one of them needs extension of license as it has not fully utilized its license in 2004. The license, therefore has been extended for two months as from Jan. 1, 2005.

Although there would be no change in the decision to remove restriction on salt import in 2005, the trade ministry said it will hold a meeting with industry and the maritime and fisheries ministries soon to discuss issues on import license and import volume. The policy on salt is not far different from rice policy. Import is banned a month before, during and two months after harvest time. Import, therefore, is automatically allowed on January 1. However, the trade ministry stated that there will be no import license for iodized salt as import quota was already used up in 2004.

Earlier, a decision of the former trade and industry minister No. 376/2004 banned imports from July 1, 2004 to Oct. 2004 as harvest took place from August 1 to Oct 31, 2004 based on the industry and trade minister's decision No. 422/2004, but based on another ministerial decision No. 376/2004, salt companies planning to import salt are required to buy salt from farmers at a minimum price of Rp 450 per kilogram for K1, Rp 100 for K2 and Rp 70 for K3 types. The license of the registered importers will be revoked if found failing to meet the requirement.

Relying on imports

Every year, Indonesia needs 2.8 million tons of salt. The country, however, has still to depend on import for part of its requirement. Domestic production averages only 1.3 million tons a year. Imports, therefore, are needed for the remaining 11.5 million tons. Imports have been made from a number of countries mainly Australia, China and India.

Change in whether affects production of salt in the country. In 1998-2201 period, changes in whether caused by the whether phenomenon El Nino and La Nina, resulted in a sharp fall in the country's salt production. The country, therefore needed to imports more salt that peaked at 1.87 million tons .valued at US$ 49.84 million in 1999. In 2000, imports declined 22.6% to 1.46 million tons valued at US$ 37.85 million. In 2001, imports rose again to 1.6 million tons valued at US$ 41.9 million, and in 2002, imports dropped slightly to 1.55 million tons valued at US$ 39.9 million. In 2003, imports totaled 1.43 million tons valued at US$ 33.85 million.

Indonesia has imported various types of salt including table salt, salt in bulk, and other types of salt. Salt in bulk for industry dominates imports. In 2002, import of salt in bulk totaled 1.55 million tons or 99.9% of the country's total imports.

Industrial salt is used by seasoning industry, caustic soda industry, textile industry, paper industry, chlor alkali industry, oil drilling industry, leather tannery, dyeing industry, drinking water processing industry, etc. The industries are among the most resilient to crisis. The malaise over the past several year did not cause a decline in demand for salt in the country. Imports even have continued to increase. The country still has to rely on import for most of its requirement especially for industrial salt. Salt used by industry is the type with high quality with NaCL content of more than 95% and water content of 0.5%. Salt produced in the country is inferior in quality with NaCl content of only 40% as production is mainly with traditional technology. Imports of table salt or kitchen salt is small. In 1999, imports of kitchen salt totaled only 2,251 tons valued at US$ 175,400--down to 1,619 tons valued at US$ 239,000. Some producers of kitchen salt import their basic material to be processed in the country.

Australia largest supplier

Australia has been the largest supplier of salt for the country. In 2002, imports from Australia totaled 1.15 million tons valued at US$28.5 million of industrial salt or 74.3% of the country's total imports of industrial salt. Australia is also the largest supplier of kitchen salt. In 2002, imports of table salt from that country totaled 509.1 tons valued at US$52,400 or 31.4% of the country's total imports in volume. In 2003, imports of salt from Australia totaled 1.29 million tons valued at US$ 29.71 million or 90.7% of the country's total imports in volume. See the following table.

Production in the doldrums

The country's production of salt totals 1 million to 1.3 million a year including 200,000300,000 tons from state-owned PT Garam and 800,000-900,000 tons by salt farmers. East Java is the largest producer of smallholder salt accounting for 570,000 tons or 52% of the total production. Central Java accounts for 220,000 tons, West Java 130,000 tons and other provinces for 16%.

By quality category I makes up only 10% of the country's total production of 1.3 million tons. Category II and category III account for the rest. The country's salt product is below the national standard. Based on the Indonesia national Standard, table salt must have NaCl content at least 94.7% with water content of 7% maximum. The content for industrial salt such as for oil drilling, textile industry, leather tannery and ice factory is around 95.97%. The content for chlor alkali industry is 98%.

Demand for industrial salt has continued to increase from year to year. The largest demand comes form chlor alkali industry averaging 730,000 tons a year, oil drilling industry 170,000 tons, ice, soap, leather and textile industries around 100,000 tons. Demand from pharmaceutical sector and cosmetic industry averages 616 tons a year. If the quality could be improved, the country could be a major supplier of salt in the world or at least could end its dependence on import. With a coast line of 81,000 kilometers the country is a highly potential producer of salt. Potential land to produce salt total 33,625 hectares and 52.6% of the potential has been used. Potential coastal areas are found in Nangroe Aceh Darussalam, Java, Bali, West and East Nusatenggara and Sulawesi. Production centers in those regions include Indramayu and Cirebon in West Java, Rembang in Central Java, Madura in East Java, Bima in West Nusatenggara, Ngada in East Nusatenggara and Jeneponto in South Sulawesi.
Table - 1
Imports of salt by types, 1998 - 2002

 Table salt Industrial
Year salt

1998 812 906,963
 174 26,348
1999 2,251 1,852,509
 175 49,170
2000 1,131 1,438,336
 168 37,115
2001 2,056 1,587,550
 253 41,251
2002 1,619 1,550,550
 239 37,376
2003 - -
 - -

 Other Tons
 types of (US$ '000)
Year salt Total

1998 222 907,997
 177 26,699
1999 12,511 1,867,271
 497 49,842
2000 6,500 1,445,967
 562 37,845
2001 6,552 1,596,158
 376 41,880
2002 487 1,552,656
 294 39,909
2003 - 1,426,340
 - 33,578

Source: BPS/Data Consult

Table - 2
Salt imports by countries of origin, 2002

Types of salt/ Volume Value
Countries of origin (tons) (US$'000)

- Australia 1,294,057 29,712.5
- India 89,581 1,951.8
- Egypt 20,000 890.0
- United States 19,816 537.4
- Japan 1,243 191.7
- Other countries 1,643 294.4

Total 1,426,340 33,577.8

Source: BPS/Data Consult
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Title Annotation:Trade
Publication:Indonesian Commercial Newsletter
Date:Jan 11, 2005
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