Vol.2 No.

2 April 2014 ISSN: 2320-4168

MARKETING OF SALT IN THOOTHUKUDI

Dr. S. Rosita
Assistant Professor, Department of Commerce, Madurai Kamaraj University, Madurai

E. Anand Kumar
Research scholar, Department of Commerce, Madurai Kamaraj University, Madurai

Abstract
Salt trading is one of the oldest trades in the history of human kind. Our interest in looking
into the salt trading network in Southern India has a specific context. Some of them supply almost
the entire salt requirement of a state. Very many others are small time operators who handle a lorry
load of salt every day. Before we go into various kinds of traders, let us have a brief discussion on
the activities of traders in Thoothukudi region. They receive orders from wholesalers, locate the
right product, buys it, process the salt to the specification, pack it to the specification and reach it
to the destination through the specified mode of transport. In most of the cases, traders are
identified as the manufacturer of the salt.
Key Words: Distribution of salt, Export of salt, Recommendation.

Introduction
Salt is an important edible component of human consumption. It gets produced in
few locations in the country but gets consumed by all. Therefore it has to be moved to all
the human habitations in the country. Iodine deficiency disorders are a series health hazard
in several pockets in the country. The serious health consequences of iodine deficiency led
the scientists, doctors and the state towards a simple solution to the problem. They
conceived a method of ensuring regular iodine intake by all in the country. They had to
include iodine in the food chain to ensure a regular intake by all. They realised that salt is
one edible item that is part of the food chain of all irrespective of age, gender, class,
caste, region etc. They wanted to access the food chain through salt. Since salt is produced
in few locations, they devised a strategy whereby salt was to be iodised at the production
centres and then distributed across the country. Simultaneously, they impressed upon the
Union and the state governments of the country to ban the sale of non-iodised edible salt.
These efforts were scuttled when the ban on sale of non-iodised salt was withdrawn by the
Union government. The main reason attributed by the protagonists of withdrawal was that
compulsory iodisation programme is inherently biased against the small salt producers and
in turn helps the large producers. Consequently, the small producers are driven out of their
business. The ban was the sole reason for their miserable condition and lifting the ban was
the only way out to save the small producers. The protagonists of universal iodisation
programme argued that the ban is not biased against the small producers. There is no basis
to show that compulsory iodisation has enabled the large producers to grow in their
strength at the cost of small producers. Unfortunately, both the claims and counter claims

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were not sufficiently backed by systemic studies on salt production and distribution. The
present effort is an attempt in that direction. Earlier, the ICCIDD had commissioned a study
to look into the structure and functioning of salt production in Tamil Nadu, the second
largest salt producing centre in the country. Given the time and resource constraint, that
study was confined to salt production and trading at one node of an entire chain vz, the
production point. The present study attempts to cover destination point. The present study
attempts to cover destination points in the distribution chain. The salient characteristics of
these nodes are put together to understand the market network of salt traders.

Objective
To identify the marketing practices and channels involved in marketing of Salt.
To study the processing and export of salt from Thoothukudi.

Distribution of salt
The salt produced in this district has been sold to the nearest state of Kerala. Sales
of salt depends quality to a large extend. The channel of distribution was simply the set of
relationship between suppliers and their immediate consumers. In the present study there
are two channels of salt marketing -
1. Producer–Wholesaler–Retailer-Consumers and
2. Producer– Wholesaler–Consumer.
The first channel is the most widely used channel, wherein commission agents
purchase from the place of production. They in turn sell salt to retailers. Finally the
retailer sells this to the consumer. In second channel, the wholesaler directly purchases
from the producer and directly sells to the consumer. The Government is providing
Iodinized salt in ration shops but the producers in this district have been producing only
common salt which lacks in market value. The government must provide facilities to these
workers to produce Iodized salt. Since, the modern trend among the consumers is to use
only iodised salt, the government must facilitate the conversion of common salt into
iodised salt, so that the market value of salt will also be increased.

Exporters
Thoothukudi being a port is the home for many export houses for several decades.
The export houses were exporting various items essentially to East Asian and South Asian
Countries. Among other items that are exported by these houses, salt is one. Salt was
mainly exported to Sri Lanka, Malaysia, Indonesia and Philippines. Recent trend shows that
there is a decline in the export of salt to these countries as the market in those countries is
flooded with salt from Australia. Whatever salt is exported from Thoothukudi is not of high
quality. The market has become so competitive that salt is not exported based on letter of
credit. Exporters take enormous risk when they export without letter of credit. The
importer can easily evade payment when they do not commit themselves through their

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banks in the form of letter of credit. Salt exports from Thoothukudi are based on trust
these days. Only those export houses that have managed to establish a trust worthy
relations with their importers over a long period of time can afford to risk such business
dealings. Hence, there is a fall in export of salt to these countries.

Details of Export of salt from Thoothukudi port (Fig in ‘000 Tonnes)

S.No Country 2007-08 2008-09 2009-10 2010-11 2011-12
1. Indonesia 0.00 0.00 16.30 292.43 82.17
2. Malaysia 20.46 20.29 28.22 41.40 33.62
3. Maldives 3.77 3.94 4.62 1.87 3.44
4. Phillippines 0.00 0.00 5.90 0.00 0.00
5. Singapore 0.03 0.28 0.42 0.43 0.44
6. South korea 0.00 0.00 0.00 0.44 0.00
7. Sir Lanka 25.55 14.19 5.89 4.97 2.49
8. Thailand 0.15 0.00 0.00 0.00 0.00
9. Liberia 5.49 3.02 1.76 1.89 2.58
10. Sierra Leone 0.00 0.06 0.14 7.10 2.80

Export of salt from Tuticorin between April and November 2012 dropped to 1.22
lakh tonnes against 1.37 lakh tonnes during the corresponding period in the previous year.
However, salt production showed an upward trend. Production grew by 5.7 per cent
between April and November 2012 and reached 16.45 lakh tonnes. During the corresponding
period last year, 15.56 lakh tonnes of salt was produced. “Indonesia remains the biggest
importer of salt from Tuticorin with business worth 45,000 tonnes so far this fiscal down
from 82,175 tonnes last year."Indonesia tops the list of importers of salt from Tuticorin,
followed by Bangladesh with 38, 750 tonnes and Malaysia with 27, 998 tonnes. Tuticorin salt
exporter, the export market was unpredictable. "Now many countries have invested in
manufacturing salt and demand was declining, "he said. “Besides, the domestic market has
also been slowed by declining value of the commodity”.

Summary Conclusions and Recommendations

Substantial quantity of salt produced in Thoothukudi is for human consumption and
it is mainly supplied to the adjoining southern states of the country. Nearly nine tenths of
the salt produced in the regions is moved by road.
We also found that the small producers of Thoothukudi region confine their activity
to just produce the basic salt. Every other additional processing and packing is undertaken
by the trading houses.
The trading houses are at the centre of activity and they are the interface between
the retail market and the producers. They are the agents who convert the basic salt into
various types of salt as demanded by the market.

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The traders have developed various business practices to cater different segments
of the market. These business systems are dovetailed to the labour practices and the
transport network that has evolved in the region towards a successful trade proposition.
Salt is highly differentiated both in content and in form. There are also spatial
differences in the quality of salt demanded.
There are layers of traders who take salt to the ultimate consumer and the biggest
margin goes to the retailer. The size of the margin goes when the retailer handles
differentiated salt.

Recommendations
• Salt has become a highly differentiated commodity with varying profit margins.
• Both producers and traders respond to the market signals and that is precisely why
the product has been differentiated. This is the most important lesson for the
programme.
• Iodization does not add much to the cost and given the huge margins that the
retailers make in selling salt, the additional cost should not deter them.
• Given the cost and profit structure of ordinary crystal salt, iodization can be easily
accomplished if the demand is created.
• Increased income levels in few pockets enable people to go in for value added salt
like free flowing salt. However, we cannot wait for the income of the people to go
up for them to demand iodised salt, as it costs almost nothing. In fact, for the price
that they are paying now, they should get iodised salt. Since they do not insist on
that, the traders do not bother to iodise the salt supplied to them.

Reference
• Dr.H.Sammaiah and H.Madhavi “Rights of unorganized women workers”social
welfare vol 52 no: 2 may 2005 p.p.3-6.
• Haque 10 issues “concerning employment of women in south Asia” labour
employment and human development in south Asia BR Publicity Corporation for
institute for human development.
• Nirmala Banerjee “Women workers in the unorganized sectors” the Calcutta
experience sangham books Pvt.Ltd Hyderabad 1985.
• Salt department, Thoothukudi.

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