Port Sector recovers from supply shocks, goes past pre-Covid level

Once in dire straits, India's port sector has finally started registering growth, surpassing even the pre-pandemic volumes. Between major and non-major ports, a total of 366.4 million tonnes (mt) of cargo was handled by Indian ports in the first quarter of the the financial year (Q1FY23). This is 11.3 per cent higher than the cargo handled during the same period in 2019-20 and almost 17 per cent higher than the volumes of Q1FY19. After the pandemic struck, international trade had been abruptly brought to a halt, causing severe losses to seafarers. Ports account for 95 per cent of India’s export-import trade. Dhruvaksh Saha analyses the growth rate and what are the driving factors

Tracking Recovery

Over the past 30 months, major ports handled 17% more cargo than non-major ones, with a similar growth trajectory seen during the pandemic. In March, cargo volumes hit their peak of 130 mt, with major ports accounting for 70 mt.  Cargo traffic showed a slump right after the first and second waves of the pandemic, as demand suffered. Moreover, there were also upticks in traffic, which experts believe could be due to pent-up demand

Major ports’ share in Cargo

Individual major ports have seen a restructuring in their share of the total cargo traffic. With the pandemic establishing new supply chains and the Centre’s push on coastal shipping, ports such as Paradip have gained over 2 per cent in their overall share in the cargo basket. Moreover, Jawaharlal Nehru Port Trust (JNPT) retained its share. The port, which sees a significant portion of India’s container traffic, struggled over a supply shortage of containers after the India-China conflict. The government is now pushing for self-reliance in container manufacturing

Commodity-wise growth

A comparison with Q1FY20 shows that most major items in the cargo basket have either retained pre-pandemic levels or seen growth. Experts believe that a major driving force this fiscal year was also increased demand for crude and imported coal, both of which saw double-digit volume growth. In the aftermath of Russia-Ukraine war, India increased its purchases of discounted Russian oil. Moreover, industry and power houses also had to rely on imported coal this year, amid a nationwide coal crisis