“It is a good indication that things are back on track,” said an official of the Chennai Port Trust when asked about the 5.22 per cent jump in traffic at Indian major ports in the first quarter ending June 31, 2011 over the corresponding quarter last year.

“While there were reports that the economy slowed down, the ports' performance in the first quarter shows otherwise,” he said.

Good growth

Traffic at major ports in the first quarter increased to 146.5 million tonnes as against 139.2 mt in the same period last year. The growth was despite the fact that export of iron ore and import of finished fertiliser dropped significantly in the first quarter.

However, the 25 per cent increase in handling of thermal coal and a 10 per cent increase in handling of petroleum, oil and lubricants (POL) ensured a positive growth in the overall traffic, according to data released by the Indian Ports Association.

Handling of finished fertiliser declined by 42 per cent to 18.15 lakh tonnes in the first quarter of the current financial year as against 31.57 lakh tonnes in the corresponding period last year. Iron ore handling dropped by nearly three mt to 19.4 mt (22.7 mt).

Cargo growth - weak

K. Ravichandran, Senior Vice-President, ICRA Ltd, who tracks the infrastructure sector, says while the traffic growth in coal and POL has been healthy, iron ore export and finished fertiliser imports have seen negative growth. Iron ore export was by continuing uncertainty in Karnataka, Goa and Orissa, besides hike in export duty in the recent past.

Fertilisers imports have been hit on account of impasse over MoP contract finalisation and hesitant approach by the industry to contract DAP at higher prices in light of fixed rate of subsidy. Further, there have been reports of tight availability of DAP in the global markets

Going forward, overall cargo growth outlook appears weak for the major ports in the near term because of delays in finalisation of DAP and MoP import contracts, he said.

Decline

Four ports — Chennai, Kochi, Mormugao and Mumbai — reported a drop in cargo handling in the first quarter. In Chennai, it was mainly due drop in iron ore handling of just 29,000 tonnes as against 15.66 lakh tonnes in the same quarter last year. Chennai handles most of the iron ore from Karnataka, and the cargo is exported to China from here.

“The ban by Karnataka has hit the Chennai port badly last year and the trend continues this year as well,” said a source.

Finished fertiliser

Delay in procurement of DAP (di-ammonium phosphate) by the Government of India led a 42 per cent drop in handling of finished fertiliser at major ports in the first quarter of the current financial year, according to sources in Kandla.

The delay in procurement was due to high price of the cargo in the international market. The price ranged between $550 and $620 a tonne as against $415 and $500 a tonne a few months ago.

The DAP is normally used during ‘kharif' season.

Also, not a single consignment of muriate of potash (MoP) has come to an Indian port during the current financial year affecting the import of finished fertiliser, according to sources.

Kandla port

Kandla is the largest handling port for finished fertiliser even as volume of this cargo in the first quarter declining to 10 lakh tonnes (16.26 lakh tonnes). Similarly, at Visakhapatnam port, the volume dropped to 4.20 lakh tonne (8.08 lakh tonne), according to IPA data.

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