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China to end "exclusive sales" pattern in salt industry

2016-12-14 16:39

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Salt industry system reform implementation schemes by 31 provinces and cities have all been submitted as of December 6, and approval work is expected to be completed before December 20, Shanghai Securities News quoted Zhao Chenxin, a spokesman for the National Development and Reform Commission (NDRC) as saying on December 13.

The Ministry of Industry and Information Technology (MIIT) on December 9 solicited public opinions on revised food salt monopoly methods as well as revised salt industry management rules which highlighted that designated food salt manufacturers can participate in food salt sales in the market and the food salt prices would be market-oriented.

Designated food salt manufacturers cannot sell their salt directly to end consumers previously, according to industry experts, noting that these manufacturers can only sell to wholesale companies instead which also have regional restrictions.

Such "exclusive sales" pattern by the wholesale companies would change after the reform and salt makers could go into the market freely, experts say.

The reform would advance upgrades and growth of the country's salt consumption through market competition, said Duan Yifan, researcher with Pacific Securities.

China has abundant salt production capacity which could keep price stable and see price drop in certain areas after the reform, said Zhao Chenxin.

Earlier this year, the NDRC has announced that China decided to remove administrative price controls on the salt market to foster competition. Starting from January 1 of 2017, ex-factory, wholesale and retail salt prices will be decided by the operating costs of businesses, product quality and market conditions rather than the government, according to the NDRC announcement.

The move will put an end to the nation's state monopoly over the salt industry over more than 2,000 years. The country's designated food salt manufacturers had a total output capacity of 48 million tonnes annually in 2015 with yearly demand only stood at approximately 10 million tonnes.

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