Delayed rains lead to higher salt output, prices decline

A normal salt production year starts in Oct-Nov and goes on till the advent of the monsoon in June; the usual national production is about 24 million tonnes

A deferred monsoon resulting in more production and, thereby, more supply of raw salt has led to prices of the commodity falling 15-30 per cent in recent weeks. From the usual Rs 700-750 a tonne, prices are now Rs 550-600 a tonne, say those in the sector.

“If there is more of monsoon delay, prices might fall further,” said B C Raval, secretary, Indian Salt Manufacturers Association.   

This increase in production comes right after an output deficit. A normal salt production year starts in October-November and goes on till the advent of monsoon in June; the usual national production is 24 million tonnes. The 2013-14 production, however, began only in February,  due to sporadic and unseasonal rain. Industry sources said the year had so far seen 18-19 mt of output. A deferred monsoon has helped reduce this gap and production is expected to touch 20 mt.

“In Gujarat, against a normal production of 14-15 mt, production this year was witnessing a deficit of 35 per cent. However, the delayed monsoon has thankfully brought down the deficit to 15 per cent,” said Raval.

G S Jhala, chairman of Dev Salt Pvt Ltd, which manufactures 400,000 tonnes annually, of salt, says manufacturers with holding capacity have been able to safeguard themselves so far from the price fall. “If the monsoon gets deferred further, salt prices might continue to fall as production is still rising,” he said.

Salt is manufactured in seven states — Gujarat, Rajasthan, West Bengal, Maharashtra, Tamil Nadu, Odisha and Andhra Pradesh. Gujarat accounts for 70-75 per cent of the total.  And, two-thirds of salt consumers in the country source the commodity from Gujarat.

Despite good rains in the past few days, manufacturers say production seems likely to go on for another week, after which the industry will assess the scenario.