Kolkata Port mars govt effort to check prices of sugar and pulses

The Centre?s effort to arrest rising prices of pulses and sugar has no impact on the eastern India market with the Kolkata Port Trust (KoPT), India?s third largest cargo handling port, serving the entire east and north east, failing to facilitate stock clearance in time.

Members of the Pulses Importers Association alleged that while the free period for keeping stocks in the port land has been reduced from one month to 21 days, the KoPT management has not come up with facilities for faster clearance.

A Majumdar, KoPT?s deputy chairman, said demurrages were being charged for pulses and sugar imports, which importers were not taking out of the port after expiry of 21 days. The demurrage was charged following Tariff Authority for Major Port?s (TAMP?s) notification.

The food & agriculture ministry requested the shipping ministry in August to take such measures so that importers of sugars and pulses are barred from stocking their imports in port warehouses and are forced to push into the market immediately after it lands on the ports.

Following the food and agriculture ministry?s request, the shipping ministry gave two orders-first on August 21, which said that all imports of pulses and sugar have to be taken out of the port premises within three days and second on September 17, which said that importers of sugar and pulses will be allowed a free period of 21 days instead of one month to keep their stocks in the port warehouses. If imports were not taken out of the port warehouses within 21 days after landing, it would attract demurrage charges four times of the licence fee, a charge taken for occupying port land to stock goods.

The September 17 order was given canceling the order of August 21, as it was erroneous without any mention of whether the three-day period would commence after the expiry of one month free period or it would be three days after landing. Although there was no hassle for most of the importers using 11 major ports save the KoPT?s dock system to clear stocks within 21 days of landing, four major importers- Adani Enterprises Ltd, National Steel( Ruchi), R. Piyarelall Import and Export Ltd and Prime Impex- moved the Calcutta High Court against the KoPT board of trustees.

The importers alleged the port was not providing facilities to clear stock within the stipulated period and charged demurrages for late clearance owing to faults not committed by the importers.

Ramesh Kr Agarwal, vice president of Pulses Importers Association, told FE that KoPT?s public health office takes 21 to 35 days to give clearance, but exporters are being attracted of penalty or demurrage only after the expiry of 21 days free period. ?Why should importers pay demurrage charges when the delay in taking out stocks is due to the delay made by the KoPT?s public health office,? Agarwal said.

Majumdar said subsequent to the shipping ministry?s order, TAMP issued a notification announcing the rate of demurrage. According to TAMP, demurrage should be four times of the licence fee, which is currently between Rs 50 and Rs 75 for every sq ft of port space occupied.

?We are taking demurrage according to the TAMP order and there is no violation of any rules,? Majumdar said.

KoPT officials said the new TAMP order was applicable only for imports of pulses and sugar that landed in KoPT after August 24. No such imports were awaiting port clearance and it was only for the delays made by the importers that the demurrage was taken.

An official of Adani Enterprises said from September 18, after the notification of the shipping ministry?s second order, only 1000 tonne of finished sugar was allowed to be taken out from the port free of demurrages. Thereafter, for every quantity of sugar and pulses taken out, importers had to pay huge demurrage, which added to the market price.

The levy actually had an impact of Rs 2 for every kg of sugar and pulses and that automatically have been passed on to the consumers, Agarwal said. Sugar in Kolkata?s wholesale commodity market is costing between Rs 32.50 and Rs 33 per kg and pulses (moong) between Rs 85 and 87 a kg.

?One lakh tonne of pulses are currently lying in the Kolkata Dock System and this has to be brought out paying full demurrage charges. The government?s effort to contain rising prices of sugar and pulses is being hampered in this way,? Agarwal said. Besides, the delay by KoPT and customs in giving clearance is creating supply constraint, Agarwal added.

Adani Enterprise officials said ships loaded with only 20,000 tonne of pulses are currently unable to enter Kolkata Dock System (KDS) for draught constraints and are being diverted to Vizag or Paradeep ports. This is adding to the cost of transportation to bring in to the Kolkata market, which is further being passed on to the consumers.