Covid-19 impacts salt demand, drop in exports fills gap of lower output

Gujarat produces almost 80 per cent of the salt produced in India | Photo: Reuters
Salt demand took a big hit this season following the lockdown that was imposed in the last week of March. An expected 40 per cent drop in exports this salt season due to slowdown in industrial and economic activity over the past one year, closure of eateries the past month-and-a-half, and caustic and soda ash companies running at lower capacities are expected bring down overall demand by 20 per cent.

India’s salt season is from Mid-October to June. This year the season started 6-8 weeks late because of the extended monsoon, impacting the production usually seen by April-end.

Bharat Rawal, President, Indian Salt Manufacturers Association (ISMA) said, “Salt production starts Mid-October, but was late this time because of the extended monsoon, lowering production by 15-20 per cent over the same time last year. However, the salt making industry is still holding around a million tonnes of stock from the previous season. If there is no rain in Gujarat till June end, which is normal, part of the production loss can be reversed.”

India produces 30 million tonnes of salt every year and exports over 10 million tonnes. Industrial use and consumption is 9-10 million tonne per annum. This year is bad in terms of demand with exports already seen falling by 4 million tonnes.

A senior official at a large soda ash maker in Gujarat said, “Salt processing activity was hit because of most plants across industry were either running at lower capacity or were closed in the initial phase of lockdown. There is a fall in demand for products manufactured from salt.” He said production loss seen in the early part of the season is unlikely to hit industries.

Gujarat produces almost 80 per cent of the salt produced in India. Of the total production in Gujarat, Kutch district alone produces 80 per cent while rest comes from Saurashtra and other parts. Shamji kangad, one of India’s largest salt exporters and sectary, Kutch Small Salt Association said, “This season a near 40 per cent or 4 million tonne fall in salt exports is largely due to lower demand from China and other importers. This began early this year with overall the economic slowdown which is not aggravated by Covid-19.” For India, the fall in exports due tp lower demand has more than made up for lower production due to delayed start of the season.



Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel