Home Bangladesh Farmers get only Tk 7 per kg of salt
Bangladesh - January 20, 2022

Farmers get only Tk 7 per kg of salt

Market price Tk 34

-An average price of Tk 7.22 at the level of unrefined salt farmers
-The cost for fine granule to refine and reach at the market at Tk 23
-The cost for thick granule to refine and reach at the market at Tk 14
-Sale at market on the basis of brand between Tk 32 and Tk 35
-Profit of retailers at Tk 9 to Tk 12 per Kg

Mahfuja Mukul: After producing one kg of salt, the farmer gets Tk 7.00 by selling it. After processing the salt in refined manner, it costs Tk 23 to reach the retailer. Retailers buy this salt for Tk 26. In the market, per kg salt is sold at Tk 32 to 35 depending on the brand.
The calculation of this big change in price is nothing new. The government regulators have been informed in this regard in multiple reports of two separate organizations under the Ministry of Commerce and Industry. But apparently no steps have been taken to regulate prices. So far, the Ministry of Industry has limited all its activities to supervising the production of salt and the Ministry of Commerce has from time to time allowed imports to meet the deficit. As a result, the issue of price control has been neglected for a long time.
The country’s salt production is directly supervised by the Small and Medium Industries Corporation (BSIC), a subsidiary of the Ministry of Industries. According to the company, the average price of one kilogram of unrefined salt is Tk 7.22 at the farmer level. After refining this salt in the most modern way (vacuum), it costs Tk 23 to reach the market by adding iodine. Later it is being sold in the market at an average price of Tk 35 per kg.
Not all salts in the country are purified by vacuum method. If not super-refined (fine-grained) it is a medium-grained mechanical method. In addition, salt is refined in the traditional way of coarse grains. These salts are being sold more in the open.
According to BSCIC, the cost of salt in coarse grains is Tk 14 per kg as against a profit of Tk 4 per kg and in medium grains it is Tk 6 per kg.
Omar Farooq Mithu, managing director of Madhumati Salt Industry, acknowledged the gap between production and prices at the consumer level. Although he claims that most of the profits are going to the pockets of wholesalers and retailers. They do not want to sell salt if they do not get much profit.
Omar Farooq told, “We have repeatedly told the government about this. He does not want to sell salt if retailers and wholesalers write low prices. The shopkeepers force us to keep higher margins and write higher prices. Otherwise, the brand does not sell.’
‘Because of this the mill owners are forced to write higher prices on the packets. The sellers sell at that price. They get most of the profits.
Omar Farooq also claimed that the Salt Mill Owners Association had sent a letter to the Bangladesh Trade and Tariff Commission (BTTC) mentioning the matter. According to them, the owners want to reduce the maximum price on the packet. The letter asked BTTC to fix the retail price.
However, although BTTC was contacted in this regard, some officials could not give any answer.
On the other hand, in 2020, BTTC submitted a report to the Ministry of Commerce and business associations. The report also touched on the issue of over-profits in the salt sector. But later it was sent to the Ministry of Industries to stop the price. But it didn’t work because of the fog.
In that report, the Tariff Commission gives information about the super profit in both production and import. They have shown that retailers are given a chance to make a profit of more than Tk 9 to 12 per kg from the sale of refined salt.
The company says it costs companies Tk 12 per kg of refined salt. Then the production cost of refined salt in vacuum evaporation method is Tk 23.33 per kg including other materials, management and financial cost.
And the retailer buys this salt at Tk 26. The maximum retail price (MRP) written on the wrapper is 35 rupees. As a result, retailers get a profit of Tk 9 per kg.
In this regard, the Tariff Commission has recommended that it is possible to reduce the price of salt by reducing the profits of retailers with the guidance of salt refiners.

At the import stage, the price per kg (FOB) of salt imported from India fell from Tk 0.90 to Tk 1.20. With all kinds of taxes and expenses, the cost to reach this salt factory is less than Tk 7, which is being sold at Tk 35 after being processed in the same way.
AHM Safiquzzaman, Additional Secretary (Import and Internal Trade Division) of the Ministry of Commerce, told Daily Industry that the Ministry of Commerce looks into the issue of salt imports. If the market is also an import dependent product, we control its price. Or the products contained in the Essential Commodities Act. There is no salt in any of them. This is the work of the Ministry of Industry.
On the other hand, the Ministry of Industry says that BSCIC works with salt. In this regard, BSCIC Director (Industrial Development and Extension) Zakir Hossain told that BSCIC is working on the issue of salt production and marketing. The issue of price control is not ours.

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