A day before the release of industrial production data for June, freight data from major ports has shown a dismal trend, indicating that an economic recovery has to be led by domestic demand.

Cargo handled at the 12 major ports in April-July grew by a marginal 1.17%, year-on-year, to 180.1 million tonne, according to Indian Ports Association data. This compares poorly with the 8.26% growth in the cumulative volume of cargo handled at these ports in the same period last year to 178 million tonne.

The data chiefly includes movements of products like iron ore, POL (petroleum, oil & lubricants), fertilisers and coal, besides container cargo.

Surprisingly, production of these commodities had shot up by 26.7% in June. The spike in the index of six core industries at 6.5% has been the highest in the last 16 months, since February 2007. For the quarter, the pick-up has pushed up the growth of this segment to 5.8%, marginally higher than the 3.5% growth clocked in the first quarter of last year.

The traffic volume at the major ports is about 5% lower than the target of 189.6 million tonne set by the shipping & ports ministry for April-July. The government has set a target of handling 1 billion tonne of cargo at all Indian ports by March 2012.

?China, which was on an iron ore buying spree, has not come to the original level, and hence, iron ore export is suffering. The trend is expected to continue till the end of December this year?, said S Kulkarni, secretary of Indian National Ship Owners Association.

An official from the Kolkata Port Trust said, ?The export duty in India makes iron ore expensive compared to other places like Brazil. Since steel production has gone down in India, the import of coking coal has gone down significantly.?

A fall in iron ore exports and coking coal imports has been a drag on the country?s major ports. While iron ore throughput at the 12 major ports declined 1.96% y-o-y to 30.2 million tonne, that of coking coal fell 24.3% to 8.3 million tonne in April-July 2009.

During the same period last year, the volume of iron ore handled at the ports had risen by 12.85% to 30.8 million tonne, and of coking coal by 40.44% to 10.9 million tonne.

Container traffic declined by 5.4%, with the major ports handling 2.2 million tonne twenty-foot equivalent units. During Apr-July 2008, container traffic had increased by 11.28%. POL cargo increased by 1.96% to 56.7 million tonne compared to 2.25% a year ago.