By Syed Wahaj Ahmed
Lifting a ban on trade with India and scaling down taxes on imported salt materials including packing and others can play a pivotal role in revitalising the salt trade sector, while fostering economic growth and generating local jobs, Salt Manufacturers Association of Pakistan (SMAP) leaders said.
They said this while talking to The Express Tribune, rising production costs and hindering competitiveness in the international market agonised and discouraged salt manufacturers on account of high taxes on salt imported materials.
On top of that, they said higher freight transportation services have been taking a heavy toll on the local salt industry because of the Red Sea issue following the Israel-Hamas conflict.
High-value cargo ships are being attacked in the Red Sea since Nov 2023 because of Israel-Hamas war in Gaza, Palestine, such attacks have coerced shipping lines or companies to reroute and take the longer voyage with higher freight transportation charges. It is pertinent to mention here that freight services are still lower than that of Covid-19 levels in 2021.
The Red Sea issue brings about two major problems for the entire exports of the country (Pakistan) including salt industry, first there are serious disruptions of the supply chain these days. Secondly shipping lines have pushed up freight transportation charges from $800-$1,000 to $4,000 per container which carries 25 tonnes/ 25,000 kilograms of salt. However, 25-tonne salt is valued at from $3,000-$4,000 and sometime above. The salt is a cheaper product and exporters of salt are unable to afford these whopping freight transportation services. Salt exporters plead for urgent intervention of the government to find out some useful solution to problems instead of going into hibernation once it neglected this issue at the time of Covid-19 pandemic in 2021.
Around 150,000-200,000-tonne salt about worth Rs15 billion [Rs14,859 million for year 2022-2023] are exported annually.
“For years, the salt trade has been facing a host of challenges including impeding a smooth operation and impacting various stakeholders involved in the industry. One major challenge is the ban on trade with India, resulting in decreased revenue for salt manufacturers in the country, disrupted trade routes, and reduced overall profitability in this salt trade sector,” SMAP Chairman Qasim Yaqoob Paracha said.
He said addressing these challenges calls for collaborative efforts between the government and the industry stakeholders. He said through constructive dialogue and effective policy implementation, comprehensive solutions can be devised to revitalise the salt trade and unlock its full potential.
“We can create an enabling environment for the sustainable growth and development of this sector, contributing to the overall socio-economic development of the country. We expect the government’s proactive initiatives and decisive actions in resolving the issues, ushering in an era of progress and prosperity for all stakeholders,” he said.
Speaking about highlights of the local salt industry, leading exporters and the industry pundits said they have been talking to TDAP about Minimum Export Price (MEP) and GI-tag. SMAP leaders are talking to Trade Development Authority of Pakistan (TDAP) to improve trade through social media while deploying a GI (Geographical Indication)-tag on products. They stressed need for work on online salt with e-stores, while focusing on brand and quality to enhance image of the country once it is exported. Implementing MEP (minimum export price) is being criticised nowadays, but it has long-term benefits.
What’s more, they said barring around 300 salt exporting companies, another about 800 companies are mining and processed salt in the country, while approximately 300,000 people are scratching a decent living from this industry.
There are approximately 4 million tonnes of local consumption including 90% or 3.6 million tonnes for the industry [caustic soda, glass, PVC (Polyvinyl Chloride) etc] and 10% or 400,000 tonnes of edible salt per annum in the country. There are three main kinds of salts including sea salt, lake salt, rock salt with various colours including white, pink and others derived from Khewra, Ibrahim Haideri, Mauripur, Tharparker and other areas of the country.
Meanwhile, since Nov 12, 2023, re-implementing the Axle Load Regime (ALR) of the National Highway Safety Ordinance (NHSO) 2000 is also impeding the local salt trade throughout the country as the cargo vehicles are not being allowed to carry the routine cargo load on highways and motorways. The industry mavens said it must be implemented gradually and highways should be well maintained.
