As the downturn in global trade continues, Indian ports have seen volumes shrink for more than 5 months now. The 12 major ports, which handle 90% of the country's export to import cargo saw traffic fall 4.2% in February as compared with the same period in 2008. Volumes fell in nine of the 12 ports during the month.
According to data released by Indian Port's Association, which represents the 12 government owned ports, the ports have failed to meet their yearly targets. Only the Ennore, Marmagao and Kandla ports saw volumes meet their annual targets. Around 95% of India's international trade volumes are handled by the country's state owned and privately managed ports. Of this, almost 70% is contributed by the 12 major ports. Hence, experts feel cargo growth at these ports is a good indication of the situation of the Indian economy and its trade status.
However, the decline in volumes started post September; hence cumulative traffic has recorded an increase of 2.24% YoY.
Mr J Bhargava vice president chartering of JM Baxi & Company said that iron ore remains the worst hit commodity, owing to China's withdrawal from imports. Besides, exports of agri commodities to Japan and Korea have also seen a decline.
Mr Bhargava said that "Chinese yards already have about 65 million tonne of iron ore stock lying, and hence there is no requirement. Coal, India's second largest traded commodity saw lower imports as companies tried to re-negotiate freight rates owing to the drops in coal prices. Even power companies are not lifting the full requirement of coal."
Along with the weak commodity shipping market, shipment of high-value cargo through containers saw one of the sharpest falls, with volumes plummeting 26.2% in February. The largest container port, Jawaharlal Nehru Port Trust handled 2.58 million TEUs in February. While the removal of the export ban on Basmati helped exports, import volumes were hurt by the ban on import of Chinese toys.
Mr SN Maharana chief manager-operations at JNPT said owing to reduced demand for cargo, JNPT is expecting to see yearly growth of only 3.6% against last year's 23%. We do not expect much growth as we will handle close to 57 million TEUs in FY 2008-09 as against 55 million TEUs last year."
Industry observers feel March could follow the trend of the last 2 months and the container volumes could temporarily bottom out. Bhaskar Chakroborty and Param Desai of IIFL wrote in their latest report that as finished goods inventories remain high across the globe, it points to weak growth. De-stocking is likely to extend for the next 4 to 6 months.
Source : DNA