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A deferred monsoon resulting in more production, and thereby more supply, of raw salt has led to prices of the commodity fall by average 20-22% in the last few weeks. From the usual price range of Rs 700-750 per tonne, salt prices have fallen from anywhere between 15% and 30% to current levels of Rs 550-600 per tonne, say industry players.
As against the usual mid-June, the advent of monsoon has been delayed in several parts of the country by 3-4 weeks, resulting in increased production of salt.
"Prices have already fallen by an average 20-22% due to increased production of salt. However, so far this is only in the case of the extreme needy sellers. If the advent of monsoon further delays, then prices may fall further," said BC Raval, secretary, Indian Salt Manufacturers' Association (ISMA).
According to GS Jhala, chairman of Dev Salt Pvt Ltd which manufactures 400,000 of salt, manufacturers with a holding capacity have been able to safeguard themselves from the price fall so far. "If monsoon gets deferred further, salt prices may continue to fall since production is still rising," Jhala added.
Salt is manufactured in seven states including Gujarat, Rajasthan, West Bengal, Maharashtra, Tamil Nadu, Odisha and Andhra Pradesh, of which Gujarat accounts for 70-75% of the total production. What's more, almost 60-65% of salt consumers in the country source the commodity from Gujarat.
However, the delayed monsoon has led to increased salt production at a time when the industry was facing a production deficit. While the industry usually begins salt production in October-November, this year production began only in February due to sporadic unseasonal rains, resulting in a production deficit of 35%.
"In Gujarat alone, as against a normal production of 14-15 million tonnes of salt, production this year was witnessing a deficit of 35%. However, the delayed monsoon has thankfully brought down the deficit to 15% now," said Raval.
Meanwhile, nationally, salt production in a normal year tends to be around 24 million tonnes.
