SALT IN ECONOMICS

As a precious and portable commodity, salt has long been a cornerstone of economies throughout history. In fact, researcher M.R. Bloch conjectured that civilization began along the edges of the desert because of the natural surface deposits of salt found there. Bloch also believed that the first war - likely fought near the ancient city of Essalt on the Jordan River - could have been fought over the city's precious salt supplies.

In 2200 BC, the Chinese emperor Hsia Yu levied one of the first known taxes. Much later the salt tax was responsible for toppling China’s imperial government in the early 20th century. In Tibet, Marco Polo noted that tiny cakes of salt were pressed with images of the Grand Khan and used as coins. Salt is still used as money among the nomads of Ethiopia's Danakil Plains.
Greek slave traders often bartered salt for slaves, giving rise to the expression that someone was "not worth his salt." Roman legionnaires were paid in salt - a salarium, the Latin origin of the word "salary."

Merchants in 12th-Century Timbuktu - the gateway to the Sahara Desert and the seat of scholars - valued salt as highly as books and gold.
In France, Charles of Anjou levied the "gabelle," a salt tax, in 1259 to finance his conquest of the Kingdom of Naples. Outrage over the gabelle fueled the French Revolution. Though the revolutionaries eliminated the tax shortly after Louis XIV fell, the Republic of France reestablished the gabelle in the early 19th Century; only in 1946 was it removed from the books.The Erie Canal, an engineering marvel that connected the Great Lakes to New York's Hudson River in 1825, was called "the ditch that salt built." Salt tax revenues paid for half the cost of construction of the canal.

The British monarchy supported itself with high salt taxes, leading to a bustling black market for the white crystal. In 1785, the earl of Dundonald wrote that every year in England, 10,000 people were arrested for salt smuggling. In India salt was taxed as early as the 4th century BCE during the period of Chandragupta Maurya. The Mughals taxed salt in Bengal. Robert Clive taxed salt in 1765 and monopolised salt production and distribution. London eventually forced the East India Company to give up the monopoly. During the period of Warren Hastings, salt tax revenues increased. Cornwallis increased it further since the administration required that extra revenue. An average family of four required 41 pounds of salt per year in 1788 costing 2 rupees, which was two months’ wages for the family at that time.

The Economics of Salt

World supply and demand of salt to continue steady rise: Salt is perhaps the only industrial mineral that is used by virtually every human being. It can also be found in every country and is produced commercially in some 120 countries of the world. World production of salt in 2003 stood at 223 Million metric tons   falling slightly from the record level of 225 Million metric tons in 2002, but supply continues to exceed demand by an estimated 10 Million metric tons. Most of the markets for salt are mature, especially those of North America and Western Europe, and growth in world output has averaged no more than 1.5%pa since 1994. Growth rates are not expected to increase in the coming five years and hence output should reach around 244Mt in 2009. End use patterns are very similar among developed nations, where the chemical industry is dominant, while in lesser-developed countries food and agriculture tend to be more important applications.The two main salt consuming regions are Southeast Asia and North America. While the economic downturn of 2001 and 2002 has restricted growth in demand in many regions, demand for downstream products in Southeast Asia, in particular PVC, has shown relatively strong growth and consequently salt demand here has grown at a rate faster than the world average. Salt consumption in food has risen by 1.4%pa in the past 28 years and will continue to rise in line with world population growth, with proportionately more being consumed in developing countries'The Economics of Salt' analyses the key trends, issues and developments in the market. It provides a clear insight into all areas of the industry and an authoritative analysis of the prospects for the future.

The Economics of Salt published 20/06/2007

Asian salt production increased rapidly since 2003

Rapid industrialisation in China has instigated a period of growth in the salt industry that has not been seen for many years, with world production reaching 256Mt in 2006. Since 2003, global output has risen at an average rate of nearly 5.2%py, while Asian output has risen by over 12.3%py. However, the rise in Asian output has not
been sufficient to satisfy all the regional demand and the shortfall has largely been satisfied by Australian production, which rose at an average rate over 5.5%py from 2000 to 2006. The principal driver behind increased production has been growing demand from the Chinese chemical industry and, to a lesser extent, from population growth. Over the coming five years, global demand is expected to grow at an average of 3%py to reach over 300Mt in 2012. There are four main end uses for salt; chlorine and caustic soda manufacture in chlor-alkali industry (38.5%), manufacture of synthetic soda ash (20%), edible salt for human consumption (17.5%) and de-icing salt (14%). End-use patterns vary from a predominance of chemical applications in highly industrialised countries to a market dominated by the use of salt in food and agriculture in less developed countries.

Report highlights

In common with many other parts of the chemical mineral sector, rationalisation and restructuring of the salt industry has continued. If the Chinese industry is considered as one enterprise, nine companies now control around a third of global production capacity. The company with most production capacity is China National Salt Industry with an estimated 18.7Mtpy, followed by K S (16.6Mtpy), Cargill (14.0Mtpy) and Compass Minerals (13.7Mtpy).

The chlor-alkali industry co-produces chlorine and caustic soda by electrolysing a salt solution. Although chlorine has a number of end uses, the most important is as a raw material in the manufacture of polyvinyl chloride (PVC), a polymer with significant applications in construction. During the period 2000 to 2006, chlorine capacity in China increased by around 7Mtpy while elsewhere it fell by around 1Mtpy. By 2012, a further 9Mtpy is forecast to come on-stream worldwide, most of this increase (8.1Mtpy) is expected to be installed in China.

Consumption of dietary salt is likely to grow in line with world and regional populations. The largest increases are expected in Asia and Africa, where largest growth in food consumption is projected. Total consumption of salt in food is forecast to rise to 48Mtpy by 2012.

Soda ash is produced either from mined minerals, primarily trona, or by chemical synthesis using the ammonia-soda process which uses salt as one of its raw materials. Synthesis remains economically viable where the markets are close to the production sites, and to locally available sources of salt and limestone. The situation in China differs in that there is significant co-product process capacity with ammonium chloride finding application as a nitrogenous fertiliser. This, and the drive for self-sufficiency in an essential raw material has led to substantial expansion of China's synthetic soda ash production. Global salt use for soda ash production in 2006 is estimated at just over 50Mt.

 

Read More:
● What is Salt
● Properties of Salt
● Salt Uses
● Chemicals From Salt