Jakarta. A robust domestic salt industry may be the recipe for Indonesia to cut its trade deficit with Australia, according to an expert.

The Trade Ministry data shows Indonesia’s imports have been exceeding what it exported to Australia. In 2021, Indonesia-Australia trade stood at $12.6 billion, but the Southeast Asian country suffered a $6.2 billion deficit. Bilateral trade rose to $13.3 billion the following year. But again, Indonesia recorded a trade deficit with Australia, reaching $6.3 billion.

Economic think tank INDEF attributed the sizable deficit to Indonesia’s salt imports, among others. INDEF executive director Tauhid Ahmad said that Indonesia had been importing salt for industrial purposes from Australia in large numbers.

“We should reduce our reliance to cut our trade deficit with Australia such as by improving our salt industry,” Tauhid told the Jakarta Globe in a phone interview on Thursday.

“A large part of our [salt industry] is still traditional. The NaCl [sodium chloride] level [of our locally produced salt] is also still low,” Tauhid said. 

The National Statistics Agency (BPS) reported that Indonesia imported 2.8 million tons or $107,529 worth of salt throughout 2021. About 2.1 million tons of salt imports came from Australia, which totaled $83,126 in value. Indonesia also imported 715,506 tons of salt from India that year, although trade was in the former’s favor. Indonesia traded $21 billion in goods with India that year, while booking a surplus of $5.7 billion.

President Joko "Jokowi" Widodo in 2022 inked a presidential regulation on improving the domestic salt industry. The document states that Indonesia will entirely use locally-produced salt to meet its domestic needs by 2024. This includes edible salt as well as those used for industrial purposes (textile, pharmaceutical, cosmetics, etc.) The maritime country, however, will continue to import salt for chemical or chlor alkali industries after that cut-off date.

Salt for industrial purposes has a NaCL level of more than 97 percent and has low water content. The Fisheries Ministry revealed, as reported by Data Indonesia, that Indonesia’s salt production amounted to 1.09 million tons in 2021.