Indian ports have recorded a growth of 11% in traffic during the April-June quarter of 2022-23 on the back of higher demand for crude oil and imported coal, signifying the opening up of the economy, a report by DAM Capital said.
The volume increase assumes significance since both prices of crude oil and imported coal have been soaring this year. Indian coal companies were pressed for supply amid a thermal coal crisis earlier in the year.
In the first three months of the fiscal year, 366 million tonnes (mt) of traffic saw movement between major and non-major ports. Of this, the government-owned major ports accounted for over 197 mt.
In the first quarter, both coal and crude oil grew 16 percent year-on-year (YoY), accounting for 105 mt and 65 mt of traffic, even on the back of record high prices.
A larger share of crude oil was moved by private and other ports, with major ports accounting for 41 mt of crude traffic during the quarter. However, YoY crude oil traffic growth at major ports is over 20 percent during this period.
“While the container volume is dependent on export volumes, coal and crude are driven by domestic consumption. We expect volume for FY23 to grow at 8-9 percent,” the report said.
The Indian crude oil imports from Russia have seen a significant leap ever since the Ukraine invasion, as per reports and government data. India’s cumulative crude oil imports rose by 21 percent in June.
The considerable surge in coal traffic comes on the back of several power companies opting for the much-costlier imported coal during the peak demand season. This was because of a shortage in domestic supplies.
On top of it, the shortage also forced the coal ministry and railways to curtail coal supply to unregulated/non-power sectors.
This ensured adequate stocks at thermal power plants.
In case of a shortfall during the peak season, the ministry of power had also asked power companies to place orders for imported coal for blending.
Union minister RK Singh recently informed Parliament that these power companies have so far placed imported coal orders of over 9.2 mt.
Meanwhile, the Centre has also been trying to push for coastal shipping of thermal coal to ease the pressure off the Indian Railways. The railways transport most of the power sector’s coal and had to cancel over 1,000 passenger trains in May to prioritize coal supply.
In iron ore, both the railways and ports have seen a decline in the movement. Data shows that YoY, iron ore traffic fell 17 percent in the first quarter of 2022-23.