With the existing quality, farmers can sell their products at prices far below those of imported salt, which is favored by consumers, but improving the quality for industrial purposes would require further processing of the salt, which would be costly for farmers and make the local salt more expensive than imported salt.

Indonesian Association of Salt Industries (AIPGI) chairman Tony Tanduk said there were only 26,000 hectares of salt farms in Indonesia, half of the ideal figure of 50,000 ha. Many of the salt farms were owned my smallholder farmers, meaning the size of the farms was mostly far below the ideal 1,000 ha.

“The quality of local salt is generally low because it is under-processed. The salt needs further processing to increase its quality, such as through gradual crystallization or vaporization,” Tony said to reporters in Jakarta on Aug. 6. “Nevertheless, our main hurdle is the availability of salt farms.”

Salt used in manufacturing requires a sodium chloride content of 97 percent, whereas most domestic salt has only 94 percent or less, according to the Industry Ministry.

The lack of quality has dragged down the local salt price to between Rp 500,000 (US$35) and Rp 1 million per ton, which is much cheaper than imported salt that sells at $50 to $55 per ton.

However, improving the quality of local salt would require more processing steps, pushing up the price to a figure that was even higher than imported salt, Tony said.

“Salt farming also depends highly on solar thermal processes, so the only ideal regions for salt farmers are in West Nusa Tenggara and East Nusa Tenggara, where the sun shines for up to eight months a year,” he added.

The Industry Ministry estimates domestic demand at 3.5 million tons per year in 2019 and 2020. About 1.1 million tons will come from industrial buyers.

The AIPGI, meanwhile, hopes the absorption of domestic salt by industries mostly beverage and food producers can be increased by 10 percent per year.

Under the circumstances, it would be difficult for Indonesia to be self-sufficient in salt production in the next few years, said Tony, adding that it would take at least four years to set up a new salt farm.

Meanwhile, Industry Minister Airlangga Hartarto said that the government has added salt farmers in opening up new salt farms so that they can improve their competitiveness.

“Imported salt is much cheaper because its origin countries have large salt farms which are operated mostly through automation,” Airlangga said. “We are working to open more salt farms in East Nusa Tenggara right now, as well as by facilitating extended [processing] technologies for the farmers.”

Like rice, sugar and several other commodities, salt is quite sensitive to import policy. The government set a salt import quota every year and whenever the new quota is announced it draws protests from local farm producers.

According to data provided by the Industry Ministry, the realization of salt imports reached 1.2 million tons in the first semester of this year, or 40 percent of this year’s import quota of 2.7 million tons.

Business Competition Supervisory Commission (KPPU) commissioner Guntur Saragih called on policymakers to take measures to protect domestic salt, including by considering imposing tariffs on imported salt.

“Imposing tariffs or other instruments could make imported salt more expensive than domestically produced salt,” Guntur told reporters on Wednesday at the KPPU headquarters. “[The decision] depends on the government.” (asp)

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