China has decided to remove administrative price controls on the salt market to foster competition, the country’s top economic planner announced Sunday. The move will put an end to the nation’s 2,000-plus-year state monopoly in the salt industry. 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, starting Jan. 1, 2017, according to a statement released by the National Development and Reform Commission…Full Article: Xinhua Finance Oct 2016

Key Point

  • China reportedly has 300 registered salt producers and 4,000 distributors.

ChinaAg Comments

  • In May 2016, China’s State Council announced they would relinquish its control over salt, allowing salt producers to determine output, prices, and sales. Traditionally, salt producers could only sell to state distributors. However, China would not permit the establishment of new salt producers/wholesalers, but would instead encourage existing companies to streamline (i.e. merges and acquisitions) with the aid of private capital/investment. The government may intervene if domestic prices become unstable.
  • In January 2016, Guangdong Salting Group opened a new salt production and processing facility (capacity of 40,000 MTs per year). The new facility will reportedly produce “high-end” salt including Aussie lake salt and low sodium sea salt.
  • China is the largest producer of salt in the world (~25% of global output), and had an estimated salt output/reserves of 71 million MTs in 2014.

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