Coal imports boost cargo traffic in major Indian ports in May 2023

Data released by the Indian Ports Association (IPA) showed that cargo traffic in major Indian ports recorded a 3.5 percent year-on-year growth in May 2023. According to preliminary data, major ports handled 68.2 million tons of cargo last month.

The increase in freight traffic was largely due to coal traffic. In May, 5.5 million tons of coking coal were handled in the ports, a growth of 35.5 percent compared to the same period last year. Steam and steam coal recorded a year-on-year traffic growth of 14 percent to 11.9 million tons. Overall, coal traffic increased by 20 percent in May.

According to a CMIE analysis, this month saw higher coal traffic due to rising imports, as the Department of Energy asked power generation companies to ensure a 6 percent blend of imported coal. It added that the decision was made to prepare for an increase in electricity demand due to forecasts of a harsher summer this year.

Coal traffic accounts for about 25 percent of all cargo traffic in major Indian ports. CMIE said the government’s advice to thermal power plants and coal mines to use the rail-sea route to transport coal in India has also led to an increase in traffic at major ports.

However, CMIE forecasts that coal traffic growth in major ports will slow in June year-on-year. It’s expected to rise 14 percent, down slightly from last month’s 20 percent growth.

Aside from coal, containerized freight, iron ore and finished fertilizer traffic saw year-on-year growth in May. Petroleum, oil and lubricants (POL) traffic fell by 2.9 percent in the major ports.

Despite Cyclone Biparjoy and the closure of some ports along the country’s west coast, CMIE forecasts that the positive growth momentum in cargo traffic will continue this month. The agency forecasts that cargo traffic will grow by 5 percent in June.

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