Iron ore traffic pulls down overall cargo growth in major ports: Report

In the first seven months of FY16, cargo volumes post modest 3.7% growth; iron ore volumes dipped 48%

While the overall cargo volumes at major Indian ports have registered a modest growth of 3.7 per cent for the first seven months of the current financial year (FY16), iron ore traffic was the most affected, dipping 48 per cent on a year-on-year (y-o-y) basis.

During the first seven months of FY16, the cargo throughput at major ports has registered a modest 3.7 per cent growth over the corresponding period of previous year, on account of continuing global and domestic slowdown. All cargo categories reported modest growth except iron ore, affected due to mining restrictions during a large part of the year in major states like Karnataka, Goa and Odisha, and fall in exports because of low prices and high export duty, highlighted a recent report on the ports sector by Icra.

Although mining bans have been lifted in these states over the past few months and export duty on low-grade iron ore has been reduced from 30 per cent to 10 per cent in May, mining activities are yet to commence in full flow.

Further, Icra felt that iron ore export is also likely to remain low, on account of healthy demand from the domestic steel industry and multi-year low export prices.

Among other cargo categories, all other categories including containers, fertilisers, coal and other cargo showed modest growth in volumes at major ports. "Coal volume growth however slowed down to 15 per cent y-o-y in this period as compared to growth of 21 per cent in FY14 and 16 per cent in FY15. Growth in coal import volumes has been lower than expected on account of the decline in domestic demand growth as well as the increase in domestic supply," the report said.

In FY15, total cargo handled at Indian ports had registered a moderate increase of 8.2 per cent to 1,053 million tonne from 976 million tonne during FY14. The growth was pegged down by a relatively weaker cargo performance at the major ports which registered a modest growth of 4.7 per cent in cargo volumes to 581 million tonnes in FY15. Non-major ports, on the other hand, pushed up the overall growth rate by recording a 13 per cent growth in throughput on a y-o-y basis to 471 million tonnes in FY15. In terms of market share, non-major ports continue to steadily increase their market share - to about 44 per cent of total cargo in FY15 as against 43 per cent in FY14.