Ban on iron ore mining in key states leads to lower cargo traffic

20 JUN, 2012, SURAJ SOWKAR, ET BUREAU
MUMBAI: The ban on iron ore mining in key states has led to a lower cargo traffic handled by the major ports in May 2012. On year-on-year basis, total traffic at all major ports combined fell by 5.1% to 94 million tons in May 2012.

Iron ore constituted nearly 15% of the total cargo volumes handled at major ports in May last year. However, with the imposition of iron-ore mining ban in Goa and Karnataka, iron exports fell 28% this May 2012. In addition, fertilizer, which forms nearly 2% of the total volumes, declined by 25% y-o-y in May 2012.

The container volumes grew by a modest rate of 5% to 5.1 million tons in May 2012. The global slowdown affected the exports this year. In addition, capacity constraints at few of the major ports led to shift in container volumes to private ports. Ports like JNPT and Chennai are operating at near capacity since the past few quarters. As a result, incremental volumes were handled by private ports like Mundra and Pipavav. These two ports also have a locational advantage over JNPT. Mundra and Pipavav ports are closer to the industrial regions in Rajasthan and Haryana

Going forward, cargo and container volumes are likely to remain under pressure, as the current macro-economic situation is unlikely to improve in the short term. Besides, expansion at major ports is yet to take off due to delay in clearances from the government.