Purchases of Local Salt to be Effective with PSO

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Jakarta – | Indonesian state-owned salt company PT Garam has already absorbed 146.000 (one thousand and fourty six thousand) tons local salt since 2016, in which it is stored in the company’s warehouse and another 16 units, built under the scheme of government capital (PMN). The warehouse management is to become warehouse receipt. “(the scheme) is to be a kind of warehouse receipt,” said the President Director of PT Garam, Budi Sasongko.

The warehouse receipt system enables PT Garam arrange an offtake agreement, purchasing the salt from local farmers. the salt will be stored in the warehouse, for which the system will maintain the price stability of national stock. Besides, the warehouse management will prevent the price drop, and protect local farmers from market loss during large harvest. “Anyhow, when purchasing local salt, the price is high. And the price has dropped currently, and (farmers) delay to sell. It is impossible (for PT Garam) to suffer big loss due to drop in price at the level of local farmers,” said Budi Sasongko.

In the future, PT Garam wish to get Public Service Obligation (PSO), a form of subsidizing of regular purchase for local salt. In 2019 and so on, there should be a PSO that will be helpful to maintain price stability. “We can deal at any price, (PT Garam manages to purchase) in favor of offtake agreement for the next year’s purchase, and so forth,” said Budi Sasongko.

PSO is also favorable for PT Garam preventing an idle stock in such a huge amount. The current situation, PT Garam cannot sell since none can guarantee who will purchase (the local salt). Therefore, the regulation is needed to change the current status of PT Garam into PSO. “When we absorb the salt from local farmers, the fund remains available to purchase (the salt) repeatedly,” said Budi Sasongko

The quantity of absorption in local salt will automatically create value addition with efficient management in doing business. The warehouse receipt system will maintain price stability effectively and prevent the drop of local salt when harvesting. “We won’t suffer from the loss due to the offtake agreement with local farmers. PT Garam will perform as PSO and can purchase the local salt with good price. This will be helpful to manage revolving fund,” said Budi Sasongko. (SL)

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