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Increased Import Of Coal, Crude Oil Boosts India’s Port Growth In FY23: Govt Data
This growth has occurred despite the fact that international trade has been slow for the majority of this fiscal year due to the effect of the Russia-Ukraine war on commodities
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Due to an increased supply of imported coal, increased coastal shipping of domestic coal and rising crude oil imports, India's state-owned ports experienced robust development during the first 11 months of the current fiscal year.
According to government data, the cargo increase in FY23 was 9.4 per cent, with total volumes reaching 711 million tonnes (mt).
This growth has occurred despite the fact that international trade has been slow for the majority of this fiscal year due to the effect of the Russia-Ukraine war on commodities.
According to statistics from the Ministry of Ports, Shipping and Waterways (MoPSW), overseas cargo handled at major ports grew by 10.2 per cent to 546.88 mt in April-February 2022-23 from 496.45 mt in April-February 2021-22.
The term “major ports” refers to those that are controlled by the central government.
Coastal cargo handled at major ports grew by 7.1 per cent during FY23, from 153.70 mt in April-February 2021-22 to 164.67 mt in FY23.
So far this fiscal year, imported and other unclassified coal volumes have increased by 89 per cent, while local thermal coal volumes have increased by 21 per cent. Crude gasoline cargo increased by 13 per cent as well.
The country's power generation industry, which is bracing for record-high electricity demand in the coming summer months, is one of the main drivers of coal demand.
To make up for the shortfall, the Centre has also instructed states to import thermal coal. Furthermore, non-power industries, particularly steel and manufacturing, are experiencing growth, which is driving demand for both coking and non-coking coal.
Experts think that these figures will continue to rise as more coal is transported via the rail-sea-rail (RSR) route in the coming months.
Imports of crude oil have increased since sanctions-hit Russia gave deep discounts on its oil. In February, India imported approximately 51 million barrels of crude oil from Russia, a 16 per cent increase over the 44 million barrels received in January.
Meanwhile, the international trade outlook remains bleak, which is likely to have an impact on the movement of the finished products.
Container prices in India fell 50 per cent year-on-year, from USD 4,237 in March 2022 to USD 2,127 in March 2023. Despite growth in all sectors and increased handling capacity at key ports like Jawaharlal Nehru Port (JNPT) and Deendayal Port (DPT), container cargo grew by a negligible amount in FY23.
In this year's budget speech, Union Finance Minister Nirmala Sitharaman said that coastal shipping will be promoted as an energy-efficient and lower-cost method of transportation, both for passengers and freight, through public-private partnership (PPP) mode with viability gap funding (VGF).
To protect transporters from such price volatility, the Centre is presently developing a production-linked incentive scheme for containers.
“The decline in demand for freight or containerised trade is due to the lack of significant inventory destocking in the US and EU, with the uncertainty around inventory restocking and consumer spending exacerbating the situation. This indicates a bleak prognosis for container price recovery in the near future,” according to a forecast issued earlier this week by Germany-based logistics platform Container Xchange.
“The excess of containers and falling demand is a bad sign for the global economy, as it indicates a decrease in buying and selling by people and businesses,” the report said.