Traffic at major ports grows 5% in April-May

Written by Nikita Upadhyay | Nikita Upadhyay | Mumbai | Updated: Jun 23 2011, 06:57am hrs
While the shipping sector is sailing through turbulent times, Indias port story looks promising. Traffic handled at major ports in the country saw a growth of 5% in April-May 2011 over the same period last year, signalling a gradual revival in exports amidst fear of European crisis and slowdown in Chinese trade.

In April 2011, cargo traffic at major ports was 49.8 million tonne (mt), up 7% on a year-on-year basis. This was the first time since February 2010 that growth was more than 5%.

Compared to the April-May 2011 growth of 5%, data compiled by the Indian Ports Association (IPA) show that growth in traffic volume at Indias 12 major ports in April-May 2010 was up only 3.6% over the corresponding period in 2009. Even the 5% growth, however, is modest compared to the average yearly growth of 10-12% that this sector has seen in the past. The data chiefly include movement of products like iron ore, petroleum, oil and lubricants, fertilisers and coal, besides container cargo.

The growth has been lower than anticipated. This is due to slippages in iron ore shipments. The iron ore export ban in Karnataka is contributing heavily to these slippages. Orissa and Goa also have their issues, leading to a slowdown in iron ore exports. The actual demand from China has also declined, said K Ravichandran, senior VP, head corp ratings, Icra. Fear in the shipping fraternity about the European and Greece crisis is also impacting the trade sentiment. If the oil prices rise substantially then all the economies will cap their demand, which will impact petroleum and other lubricants (POL) trade, he added.

While on the one hand, iron ore trade dropped by 15.61%, POL, coal and container cargo kept the port volumes steady. POL grew by 10.88% to 28.68 million tonne during April-May 2011. Coal and container cargo increased 32.92% and 6.19%, respectively. A low base in coal trade showed such a huge rise and the same goes for fertilisers, which has increased 52%. We expect Karnataka to start exports in the next two to three months. Trade volumes will pick up from then, said an analyst with a Mumbai-based brokerage firm.

Of the 12 major ports, only Mumbai and Mormugao ports saw decline in traffic by 3% and 4.79%, respectively. Kolkata Port, Ennore Port, Tuticorin Port and Visakhapatnam ports witnessed huge spurt in traffic volumes.