llegal potash export since 18 months

Published on 21 Aug 2009

G Saravanan

Chennai, August 20: WITH the Chennai Customs’ Dock Intelligence Unit busting the illegal export of subsidised potassium chloride (Muriate of Potash-MOP) from Tamil Nadu ports under the misdeclaration of industrial grade salts, enquires with the exim circle here revealed that the trade was flourishing for the past 18 months and the monitoring agency (Customs) hardly noticed it.

Market leaders put the loss of revenue incurred by the illegal export of subsidised potash to Malaysia around a whopping Rs 6,000 crore from Tamil Nadu alone. Though no concrete data is available to gauge the export spree of subsidised potash under the pretext of sending industrial grade salt from Tamil Nadu ports, it is believed that Chennai Port alone handled more than 60,000 containers in the last 18 months thus exporting nearly six lakh metric tonnes of industrial grade salt (potash) valued at several crores.

According to sources involved in export trade from Chennai, most of the major and minor ports in the country have recorded a dramatic surge in export of industrial grade salt since December 2007 and it was the clandestine export of the banned and restricted potash by misdeclaration of cargo.

Even during the surge, all the monitoring agencies including the Customs failed to check the spate of export of ‘industrial grade salt,’ sources say. Enquiries revealed that the clandestine re-routing of several metric tonnes of subsidised potash towards Malaysia has started after the country embarked on a massive wasteland development project to add more arable lands for vegetation.

It may be noted that the country has allotted huge volume of lands to private entrepreneurs to develop integrated farmhouses. The mission was to increase the tally of agricultural land in the country by reducing over- dependency on ageing palm plantations since it will eat away a major chunk of land without producing much revenue for the nation.

According to sources, exporters with lesser credentials in the country were lured to send more consignments of potash from Malaysian firms, as buying the same product from the major exporters (Belarusian companies) will cost them nearly 200 USD more per metric tonne. Indian Potash Limited, the major player and importer of potassium chloride in India, is importing major chunk of the mineral from Belarusian Potash Company only. And the cost of the product is worked out as 465 USD. But the market rate nowadays is hovering around 620 USD.

It may be noted that since July 24, after the Chennai Customs began smelling the illegal export of potash, no one has filed a shipping bill for exporting even the industrial grade salt to Malaysia till date and it tells the whole story.