Govt set to revoke salt monopoly: report

More market-oriented reforms expected

China plans to revoke a State monopoly over production and sales of edible salt in China, China Central Television (CCTV), the country's State broadcaster, said on Thursday, citing the Ministry of Industry and Information Technology.

The report, which has yet to be confirmed by the ministry, indicated that private capital may be introduced into the edible salt business for the first time in China.

The CCTV report drew renewed attention to previous calls for the opening-up of the country's State-run edible salt sector. An earlier report published on October 30 by the Beijing Times said talks on ending the State edible salt monopoly policy - which was introduced in 1996 to promote consumption of iodized salt so as to reduce iodine deficiency - would start in 2016.

If reform measures are put into place, the wholesale trade of edible salt will be opened up and salt prices will be liberated, according to the Beijing Times report, which cited an unidentified source at the China Salt Association.

The report also said that new licenses will come out, replacing the existing licenses for exclusive rights to production and sales of salt. Those granted the new licenses will be allowed to start operation in 2017, the source said, without elaborating.

Profits from salt trading have long been a major source of financial revenue for China, reaching back into ancient times, but now it accounts for just a tiny share of overall income. This is one reason why the salt industry monopoly might be revoked, Ma Wenfeng, a senior analyst at Beijing Orient Agribusiness Consultant, told the Global Times on Thursday.

China also abolished the agricultural tax in 2006, another area that used to be a primary source of income for the country. Its removal was widely hailed as an important measure in easing the burden on farmers.

Relaxation of controls on the salt business might indicate that more market-oriented reforms in China's agriculture sector could come in the future, Ma said, adding that introducing competition from private capital could boost the development of the salt business.

Removal of the salt monopoly would not result in a surge in salt prices, Mao Xuefeng, a research fellow at the School of Agricultural Economics and Rural Development at Renmin University of China, told the Global Times on Thursday.

But there will be a bigger differentiation between the price of high-quality salt, which includes healthy elements as well as iodine, and lower-quality salt, Mao noted.

Addressing concerns over food safety, Ma said that stricter food supervision should be implemented to ensure that iodine is still put into edible salt if private enterprises are allowed to produce and sell it.

Separately, a new rule released by the State Council in September stipulated that foreign investors would be temporarily exempt from a ban on the wholesale trading of salt by wholly foreign-owned enterprises within the China (Shanghai) Pilot Free Trade Zone.