Salt price plummets after MEHL goes back on promise

Monday, 01 March 2010 21:12 Phanida

Chiang Mai (Mizzima) – The price of salt in Burma has plummeted after the Myanmar Economic Holding Ltd. (MEHL) went back on its promise to buy 100,000 tons of salt from producers.

MEHL had planned to purchase salt in bulk for its proposed caustic factory. But it decided not to buy salt as the plan to construct the caustic factory was shelved. Salt producers were informed by the top brass of the Tatmadaw (Armed Forces)-owned MEHL at a meeting on February 7.

Consequently, the price of salt fell sharply to Kyat 40 per viss (approx. 1.64 Kg) today from Kyat 70 per viss prevailing last month in Latbutta, one of the major salt production zones in Burma.

"They told us they would not buy salt from us for the time being. The caustic factory would have needed salt as raw material had it been built. The salt would be bought when required they said," a salt producer who attended the meeting in Naypyitaw told Mizzima.

At a coordination meeting with salt producers in January this year in Rangoon, MEHL promised to buy 80,000 tons of salt from Irrawaddy Division and 20,000 tons from Rakhine State.

"When they informed us that they would not buy the salt the prices nosedived," another salt producer said.

Cyclone Nargis in 2008 ravaged over 20,000 salt fields in Irrawaddy Divsion. After which, the government and some private banks namely the Kanbawza, Myawaddy, Industry and Animal Husbandry Banks provided loans for salt production.

The banks gave salt producers loans at the rate of Kyat 300,000 per acre. Most of them have not yet repaid the principal or interest and now the price of salt is falling leaving manufactures a worried lot.

The major salt producing areas in Burma are Irrawaddy Division, Mon State, Pegu Division, Rangoon Division and Rakhine State.

The government’s salt production was over 38,000 tons last year in Mon State, Rangoon Division and Rakhine State, while the private sector produced 30,000 tons of salt last year.