Vietnam - Firms weep with salty tears

A brutal business climate has pushed salt producers to the wall.

Central Quang Ngai province just got the Sa Huynh salt brand recognition from Ministry of Natural Resources and Environment’s Vietnam National Office of Intellectual Property.

However, the provincial salt producers are not weeping with joy.

“We are happy that our salt products have been honoured with the collective Sa Huynh brand name.

However, how we can survive when one kilogramme of salt just fetches VND400-700 (1.9-3.4 US cents),” said Tran Thi Canh, a salt maker from Duc Pho district.

Cheap local salt prices have forced farmers to leave their fields and head to the big smoke like Ho Chi Minh City to make a living.

“Most Sa Huynh salt is made in poor soil so the products are of low quality, whereas investing in cement reinforced salt fields is costly. Around 5,000 tonnes of salt is currently unsold,” said Pho Thanh commune’s deputy chairman Nguyen Duy Trinh.

According to a representative from southern Phu Yen province’s Department of Agriculture and Rural Development, salt prices in September shed VND300,000 ($14.5) per tonne against July to currently stand at around VND500.000 ($24.1) per tonne, one third of that one year ago. About 8,500 tonnes of salt remains unsold in the province.

According to Phu Yen agricultural sector figures, 250 salt makers left 50 hectares of salt fields to work in industrial zones and act as fishermen in August 2011 alone.

In southern Binh Dinh province, local farmers have churned out nearly 22,350 tonnes of salt this year, but just 12,000 tonnes found buyers.

“Salt prices have fallen to VND300 per kilogramme at fields and now we have stockpiles waiting for price hikes. Salt-makers have had to go elsewhere and find other ways to live,” said Nguyen Van Hai, a farmer in the province’s Nhon Binh ward.

Binh Dinh Department of Agricultural-Forestry-Fishery Processing and Salt Industry head Nguyen Xuan Nam said: “Southern provinces have had a salt bonanza. Besides, the salt quality made in provinces like Binh Dinh, Quang Ngai or Phu Yen is not high as it contains mixtures not favourable to industrial production.”

In search of a remedy, economists suggested the Ministry of Agriculture and Rural Development propose the government urge salt trading firms to temporarily stockpile salt to help moderate salt prices.

In early 2011, the Ministry of Industry and Trade (MoIT) enacted Circular 45/2010/TT-BCT on salt import quotes for 2011 under which 100,000 tonnes of salt would be imported for chemical production and 2,000 tonnes pure salt imported for the healthcare sector.

Around 50,000 tonnes of chemical production salt were imported early in 2011.

Responsive to concerns about salt import quotes amid huge local salt stockpiles, the MoIT said imported salt should be for industrial production and the health sector.

The MoIT said the quality of salt made by local farmers was not up to par and then could not be used for industrial or chemical production.

Local chemical firms have proposed the MoIT consider further salt imports to ensure production materials.

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