Covid-19 impact: Ports with exposure to affected cargo to see muted volumes

Topics Coronavirus | port cargo

Between April and February of this fiscal, Indian major ports have recorded measly growth of 2.8 per cent to 1085 million tonnes (mt)

Ports with significant exposure to cargo affected by the outbreak of Covid-19 pandemic could see their volumes shrinking in the near term.

 

After the surfacing of the deadly Coronavirus, many industries such as chemicals, dyes & pigments, pharmaceuticals, textiles, electronics and automobiles run the possibility of short-term supply disruptions due to a production shutdown in China, a study by Icra noted.

With the contagion spreading to more countries, the supply disruptions could get more pronounced, affecting export and import trade at ports.

“Ports that have a significant exposure to the affected cargo categories could see an impact on their cargo volumes in the near term. The extent of the impact will be dependent of the duration of slowdown in consumer demand and industrial activities due to Covid-19 and the pace of subsequent recovery”, the report by Icra noted.

 

Between April and February of this fiscal, Indian major ports have recorded measly growth of 2.8 per cent to 1085 million tonnes (mt). Growth in cargo throughput has been largely contained by lacklustre 1.6 per cent growth in coal shipments. Other cargo categories like containers and bulk cargo also experienced some slowdown in year-on-year (y-o-y) growth.

According to the Icra report, “The ongoing slowdown in coal imports is most likely attributable to the economic slowdown in recent months which has brought down the overall demand. Power demand and consequently thermal power generation has witnesses a decline in the last three to four months which along with the slowdown in other consuming industries is resulting in the fall in coal demand supply gap. Growth in coal demand is also stifled by the impact of higher generation from newly added renewable capacities. Systemic inventory with users is also possibly down on account of lower ordering following the anticipation of further slowdown in demand”.

Overall container volume slowed down to 3.5 per cent in April-February as against 11 per cent growth in the corresponding period of FY19. Non major ports have outperformed the major ports in terms of retaining higher incremental cargo volumes. This is evident from the relatively higher growth of 4.5 per cent registered by them compared to 1.1 per cent by major ports. While coal logged 13 per cent growth at non major ports, it plunged 9.4 per cent at major ports. In container growth too, the non-major ports scored higher with 5.8 per cent compared to 2.2 per cent for non-major ports.

The study forecasts that containers, coal and other bulk cargo could be the most impacted categories. Liquid cargo like LNG and petroleum products would be comparatively less affected as tumbling crude oil prices would buoy demand growth.



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