India’s commodity exports pick up as port congestion eases, but labour still short

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India’s export of farm commodities, which had been hampered due to port congestion amid the lockdown for the last couple of months, have started picking up again gradually following an easing of the curbs on movement, Ritwik Sinha and Biman Mukherji report.

However, with a majority of regular workers still away, shippers are being forced pay upto 50% more in handling charges at ports like Kandla, Mundhra and Mumbai on the country’s west coast, industry executives said.

Export of all goods had shrunk by 60% month-on-month in April amid a shortage of containers with no workers available to unload cargo. Typically, the same containers used for imports are also used for exports. Moreover, there were no trucks available to transport goods from the ports.

However, an easing of the restrictions since this month have improved transport as well as goods movement at the ports, though far from normal with a majority of workers yet to return. Several ports have reported a big improvement in cargo handling activities compared to month ago levels.

“I would say about 50-60 percent of work has resumed at the major ports.  Let’s see how it works out in the coming months,” Sharad Saraf, President at the Federation of Indian Export Organisations (FIEO), told Indoasiancommodities.com

“Further improvement in activities at major ports may not happen before the second half of the current fiscal, that too if the Covid-19 crisis does not deteriorate further,” he added. 

According to recent data issued by Indian Ports Association (IPA),  the country’s 12 major ports had reported a steep decline of 21 per cent month on month in cargo volumes in April, which had stood at 47.42 million tonnes (MT). Chennai and the Jawaharlal Nehru Port Trust (JNPT) ports had reported massive drop in volume of 38.17 per cent (2.44 MT) and 33.97 per (3.95 MT) respectively.

Vineet Agarwal, managing director of TCI, one of India’s largest logistics company, said that the port situation is far better though still constrained at certain places due to a shortage of trucks .

 “Things are picking up. There is some pent up demand, which is also helping things,” he said, but added that the demand outlook ahead still remained hazy because of an expected contraction in the economy this fiscal year.

Agarwal said there were signs that the real economy could pick up and that there was good demand already for agriculture equipment and food processing, adding that the concern was that the sector’s demand might be more for low-value items.

However, things are far better than during the lockdown period when foreign ships had curtailed visits to India because of congestion at ports and and low demand.

Sanjay Sethi, Chairman of India’s largest container port JNPT, told a news agency that port capacity was back at 70%, following a bounce back in exports.

According to a senior executive of a global freight forwarding company who did not want to be identified, import containers barely saw any clearances at all during April-May.

Exports of commodities like rice, which have seen brisk demand from other countries amid fears of food shortages, were also affected due to the problems at ports, but now have started moving again, rice millers said.

Mohit Gupta at Haryana-based Bharat Industrial Enterprise said processing operations at their rice mill were still well below normal as many workers who want to come back are unable to do so due to unavailability of trains. “Our rice shipments are still at around 50% of normal.”

Private companies are having to rely on workers from other industries surrounding ports like Kandla and Mundhra for loading and unloading of cargo. Tushar Anam at logistics firm V Arjoon Shipping Limited said that he was hopeful the situation would return to normal in about a couple of weeks.

Mahendra Arya, President of All India Transport Welfare Association, which represents 60 percent of the freight trucks plying on Indian roads, echoed that port operations are still far from normal despite the government’s “unlockdown” process from this month.

“It has definitely improved in June. But as per our estimate, only 40-45 percent of trucks deployed at different ports are currently operating. The sudden surge in activities is to expeditiously clear consignments contracted earlier. If the Indian exporters or importers do not get involved in fresh contracts due to global recessionary trends, we may see a decline again in cargo handling at ports,” Arya said.

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