Protecting salt industry with Tk1!

To save the local salt industry and stop selling substandard table salt, the proposed budget for 2020-21 has proposed increasing the customs duty on sodium sulphate from five percent to 15 percent, which will increase the import cost of the product by less than Tk1.

Local salt processing and marketing companies claim that the increase of 'Tk1' equivalent tariff will not be of any use in protecting the salt industry.

According to the country's salt processing and marketing companies, sodium sulphate is sold at less than Tk10 per kg in the international market. With all the costs together, the price of the product is around Tk12 per kg.

After the 10 percent increase in customs duty, the cost will not increase even by a single taka, and the price will come close to Tk13, which will not be of any use in the protection of the domestic industry.

Mollah Salt Ltd's general manager Abdul Mannan told The Business Standard, "We demanded that the same amount of duty be levied on the import of salt as on the import of sodium sulphate because many people are selling salt in the market under false pretences. Increasing the customs duty by 10 percent could lead to a maximum difference of Tk1 per kg, which will not be of any use."

The explanation for increasing the customs duty on sodium sulphate/disodium sulphate is even though the import of table salt (sodium chloride) has been banned in the country for a long time, there is an opportunity to import industrial salt (sodium sulphate/disodium sulphate). As the price of industrial salt differs from that of edible salt, the trend of importing edible salt through false declarations has been noticed.

There are also allegations of marketing of edible salt mixed with industrial salt, which is seriously harmful to public health. This is damaging the country's marginal salt farmers and salt mills and creating public health risks. There is a proposal to increase the existing tariff rate on industrial salt imports to protect the salt produced by the salt farmers, and reduce public health risks by ensuring a fair price for the salt produced in the country.

Earlier this year, the Bangladesh Trade and Tariff Commission organised a public hearing with all concerned. According to people concerned, the commercial import of salt is prohibited for all, including salt refining mills, as per the import policy order. There are opportunities to import salt only through raw material of chemical products, raw material of pharmaceutical industry and bonds. There is an unequal competition with the domestic refining industry by importing excess salt in demand under the tariff concession facility.

Sources said by importing and selling sodium chloride or edible salt by declaring sodium sulphate (industrial raw material), many again sell the raw material mixed with salt. Due to its low price, many importers are selling it in the market above demand.

As a result, domestic processing companies are being hit hard.

Locally produced salt is marketed by processing the salt in the most modern way (vacuum) and it is being sold at Tk35 per kg whereas the imported salts are sold at a maximum of Tk15-16.

According to the report of the Tariff Commission and others, the import of sodium sulphate in the country is low during the salt production season. Salt is not produced from July to December and sodium sulphate imports increase during this time. From which it is understood that salt is coming to the country through false declaration.

According to industry insiders, after a public hearing, the Bangladesh Tariff Commission prepared a report and recommended to the Ministry of Commerce that the same import duty (89 percent) should be imposed on sodium sulphate equivalent. Most of this duty should be a supplementary duty. To protect the domestic salt industry, no one will be able to sell salt by falsely declaring it in the market if the import duty is increased by raising the tariff in this way. However, no importance was given to their recommendation.

Nurul Kabir, president of the Bangladesh Salt Mill Owners' Association, said, "If we do not impose a supplementary duty on imports, it will never be held accountable. Therefore, 100 percent supplementary duty has to be imposed on it. Imposing 10 percent customs duty will not work."

Kamrul Hasan, business director, ACI Salt Limited, said, "Everyone knows the problems in the sector but this time when the issue came up in the budget, we were optimistic. However, the amount of customs duty that has been increased will not lead to any improvement. It will have to increase at least a certain amount of supplementary duty.

Paritosh Kanti Saha, president of Narayanganj Salt Mill Owners' Association, made the same demand.

The demand for food salt in the country is 1-1.5 lakhs tonnes per month. About four lakhs tonnes of salt is required annually as raw material for industries.