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Salt prices triple in one year, record high
Salt prices have reached an all-time high. Nguyen Thanh Hoa, deputy director of Bac Lieu Salt and Commerce Joint Stock Company (JSC) said he had been forced to buy salt for between VND1,800 to VND1,900 (US$0.1) a kilo, three times last year's figure.
Hoa said if prices did not come down, his company would cut its order from 12,000 to 9,000 tonnes a year.
Le Van Dau, director of Dong Hai Salt JSC, said his company planned to buy 2,500 tonnes of salt, but high prices and high interest rates on bank loans had made things difficult.
Dau said that salt from Bac Lieu was equal in quality to Thai salt, which fetches about VND2,000 a kilo", only a few hundred dong more than for local salt.
The high prices have pushed salt exporters into a comer. The chairman of one company said that last year his company exported 1,000 tonnes of salt to Japan.
However, in the first months of this year, this dropped to just 40 tonnes - and for only $200 a tonne. This has forced the company to rethink its export strategy.
Many other salt export contracts have been cancelled because of high domestic prices.
Although salt production was high this year, many producers have been stockpiling in the hope that prices will increase even further.
In Dong Hai District, Bac Lieu Province, many enterprises are also stocking up to avoid even higher prices.
Dau said the price spiral was similar to rises for other essential commodities.
Bac Lieu Province has 2,100ha of salt farms, mainly in Dong Hai and Hoa Binh District. Production in 2007-2008 remained at about 90,000 tonnes, enough to meet demand in the Cuu Long (Mekong) Delta region.
Pham Minh Quang, deputy director of Bac Lieu Department for Agriculture and Rural Development said another 200-300ha of salt-producing areas in the province would be added for the 2008-2009 crop. Output for this year is estimated at 110,000 tonnes.
Bac Lieu authorities have encouraged salt farmers to sell their salt instead of stockpiling it because they claim imported salt will eventually stabilise local prices.
High price for salt have made shrimp farmers in Ninh Thuan Province turn to salt production. The salt price has steadily been rising from VND1.8 million ($109) to VND2 million ($121) a tonne.
The province produces more than 250,000 tonnes of industrial and table salt each year from 1,000ha. Salt producers can earn net profit of VND1.4 million ($88) a tonne from an investment of VND1.7 million ($103).
Le Van Tien, vice chairman of Ninh Hai District People Committee said that a planned shrimp-raising area would be turned into salt flats because of the high prices.
Ton That Dung, director of Ninh Thuan Salt Co said that salt production had not met demand because of long-lasting cold in the north and heavy rain in the central region and the south.
VNN
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