Falling not salty


A drop in demand for salt after a rush of purchases at the beginning of the pandemic in the spring of 2020 led to a decline in the market. According to Rusprodsoyuz, in the first half of 2021, salt production decreased by 6.31%, to 428.48 thousand tons, and imports by 9.56%, to 275.16 thousand tons. This stimulated market consolidation and caused tougher price competition, among other things. So far, consumption has returned to the level of 2019, but market participants do not rule out surges in demand amid a worsening situation with the spread of COVID-19.

According to the results of January-June 2021, the production of edible salt in Russia decreased by 6.31%, to 428.48 thousand tons year-on-year. The indicator was also about 0.7% lower than January-June 2019, when 431.43 thousand tons were produced. Such data was provided to Kommersant in Rusprodsoyuz.

In the first half of the year, the production of the largest Russian producer, Orenburg-based Russalt, decreased by 1.54% year-on-year, to 362.59 thousand tons. At the same time, the company’s share increased from 48.4% to 52% due to a more pronounced drop in shipments from competitors.

Thus, the Tyretsky salt mine reduced its output by 30.77%, to 47.72 thousand tons, the Volgograd “Akson” – by 34.75%, to 8.39 thousand tons, the Crimean soda plant – by 36.94%, up to 2.88 thousand tons. Altai Salt Mining Company increased its production by 2.2 times over this period, up to 6.2 thousand tons. The companies did not provide comments.

In the first half of 2021, edible salt imports to Russia also decreased by 9.56%, to 275.16 thousand tons year-on-year, and its market share decreased from 39.9% to 39.1%. As follows from the data of Rusprodsoyuz, the Belarusian Mozyrsalt and Belaruskali reduced supplies by 0.26%, to 143.93 thousand tons, and by 12.05%, to 3.61 thousand tons, respectively. Imports from Kazakhstan over the same period decreased by 22.19%, to 75.81 thousand tons, from Azerbaijan – by 23.85%, to 7.57 thousand tons, from Turkey – by 8.7%, to 44 .23 thousand tons. Mozyrsoli told Kommersant that the export of products to Russia over the specified period was positive. Belaruskali did not answer questions.

Russian edible salt market in January-June 2021

Dmitry Leonov, deputy chairman of the board of Rusprodsoyuz, notes that after the peak of salt consumption in 2020, caused by rush demand amid the pandemic, the market fell due to very weak consumer activity and low demand in all segments.

X5 Group (Pyaterochka, Perekrestok, Karusel) previously CALCULATED that along with the growth in the consumption of cereals, sugar and frozen products, salt sales in the spring of 2020 jumped almost 20 times. According to Rusprodsoyuz, in the first quarter of 2020, salt supplies grew by up to 45% year-on-year.

According to Mr. Leonov, the fall in demand has led to tougher competition and lower producer prices. According to him, in the first half of the year, the drop in shipping prices for deliveries in the network reached 45%. Director of Russalt North-West, Alexander Kolomeer, notes that manufacturers still had to raise prices due to higher packaging and logistics costs, including due to an increase in rates for wagons due to a shortage of rolling stock (See “Kommersant” OT 14 JULY). According to Rosstat, in August 2021, the producer price for edible salt was 1.49% higher than a year earlier.

Consumer prices for salt over this period increased by 2.1%, to 14.25 rubles. for 1 kg.

Lenta records a decline in demand for salt by up to 10% year-on-year, noting that consumption has returned to 2019 levels. According to a representative of the network, the purchase prices for salt have not increased since the middle of last year. Magnit noted a 2.6% decline in salt demand in the first half of this year due to a high base last spring. With fluctuations in demand, the network reduced purchases, but not significantly, the company noted. Meanwhile, some chains have already asked salt suppliers to prepare for increased shipments in the event of a surge in demand amid a new wave of restrictions, Kolomeer said.

According to the forecasts of Rusprodsoyuz, at the end of the year, the volume of the edible salt market will be at the level of 1.42 million tons, which is comparable to 2019. Market growth may resume from the second half of 2022 and will depend, among other things, on the solution to the problem of shortage of railcars, says Dmitry Leonov. The Ministry of Agriculture notes that the capacities of Russian salt producers are sufficient to meet the needs of the domestic market, and output largely depends on the situation.

According to the newspaper “Kommersant”