India's iron ore exports drop 54% to 6.8 mn tonnes during April-September

Continued ban on exports from Goa and Karnataka contributed largely to the drop in exports

India's iron ore exports have further declined 54% to 6.8 million tonnes for the six months (April-September) of the current fiscal. In the corresponding period last fiscal, India exported 14.65 million tonnes and 31.44 million tonnes in the same period a year before (2011-12).

The major factor that led to drop in iron ore exports this year is absence of Goa in the export market. The exports from Goa were halted in September 2012 following the Supreme Court ban on mining and movement of the raw material. The Apex Court on October 5, 2012 ordered suspension of all mining operations including transportation in Goa.

Exports from Karnataka have been suspended since July 2010, when the state government banned exports, which was subsequently upheld by the Apex Court. Though the mining is resuming in Karnataka slowly, there is no clearance yet to resume exports from the state.

"During the period April to September 2013, exports have taken place largely from the eastern ports like Paradip, Vizag and Haldia. A limited quantity was exported from Redi port in Maharashtra during the period," Prakash Duvvuri, head of research with Ore Team, a Delhi-based iron ore research firm said.

During the first six months, exports were carried out by companies such as Rungta, S M Niryat, Kalinga Allied, Royal Line, Bagadiya, Kashvi Power and JSPL among others.

India’s exports have been on the decline over the past three years due to ban on mining in Karnataka, Goa besides imposition of 30% export duty. Higher freight charged by the Indian Railways on the export-bound raw material has also affected the export performance.

As per OreTeam’s provisional data for September 2013, India exported 1.325 million tonnes of iron ore in September based on the vessels which berthed in the month. The total exported quantity to China was just 1.44 million tonnes while 163,710 tonnes were exported to Japan and a shipment of 31,500 tonnes of pig iron was moved to Taiwan.

As a comparative view, in September 2009 Indian exports were 5.68 million tonnes while in 2010 the same figure fell to 3.13 million tonnes. In 2011, the exports picked up slightly to 3.39 million tonnes while in 2012, the exports drowned sharply to 0.45 million tonnes. The current figure for September 2013 is a welcome relief, giving a good cheer to the market but it is still quite low as compared to the volumes done from the country in the past, Duvvuri said.

Japanese and Taiwanese exports were done by MMTC while good number of private exporters and traders managed the exports to China.

Meanwhile, one of the leading iron ore export houses - Synergy Resources, exported close to 2.5 million tonnes of iron ore to China till date in 2013. Considering India’s exports for 2013 till date at 10 million tons (between January and September 2013), Synergy’s share is nearly 25%. The company is planning to export over 3 million tonnes in the full year, Duvvuri said.

“India’s iron ore will always enjoy a good demand in the Chinese markets and there will always be a need for Indian iron ore in China which would keep the exports alive from the country. The export figures might diminish to mere 5-8 million tons in the coming years and then may even become extinct at a later stage but the fact that the Indian iron ore is always required world over due to its quality and price, will prevail” he added.