India’s total trade stands at $1,044 billion, of which merchandise trade accounts for 73 per cent and the remaining is accounted for by services trade. Under merchandise trade, annual seaborne trade facilitated by ports is valued at over $600 billion.
The total port traffic has been increasing from 2007-08 to 2017-18. A similar rising trend was recorded by dry bulk and liquid bulk traffic. Overall, the country’s port traffic stood at 1,209 million tonnes (mt) in 2017-18. Of this, dry bulk accounted for 39 per cent of the total port traffic. This was followed by liquid bulk (36 per cent), containers (17 per cent) and other commodities including break bulk (8 per cent).
During the period 2007-08 to 2017-18, dry bulk traffic exhibited an increasing trend, displaying an increase of 65 per cent. Odisha, Gujarat, Maharashtra and Andhra Pradesh saw a steady increase in dry bulk traffic. On the other hand, Goa and Karnataka witnessed a 50 per cent fall on account of the ban on iron ore mining and exports. In Kerala, dry bulk traffic has remained stagnant.
In volume terms, Indian ports handled 470 mt of dry bulk in the year 2017-18. Of this, coal accounted for the largest volume at 285.5 mt, followed by iron and other ores (83.3 mt), other dry bulk (45.6 mt), fertilisers (27.7 mt), transshipment cargo (16.5 mt), and iron and steel (10.9 mt).
The liquid bulk segment too witnessed an increasing trend in cargo movement over the period 2007-08 to 2017-18. During the period, Gujarat’s traffic doubled on account of the refineries and Indian Oil Corporation Limited’s (IOCL) plants which import crude via the state’s ports. Odisha has witnessed a tenfold increase in traffic volumes due to increased activity in the Paradip refinery. After being stagnant from 2007-08 to 2012-13, traffic in Maharashtra increased marginally in 2017-18.
In volume terms, Indian ports handled 437 mt of liquid bulk in 2017-18. Petroleum, oil and lubricants (POL) and crude accounted for a major amount of traffic to the tune of 393.4 mt. The rest of the subcommodities – other liquid, edible oil, fertiliser raw materials and transshipment – accounted for the remaining 43.6 mt.
On an average, a total of 205 mt of petroleum products are consumed in the country. The components of POL prominently used by retail consumers are high speed diesel (HSD) (81 mt), liquefied petroleum gas (LPG) (23.3 mt), motor spirit (26.1 mt) and aviation turbine fuel (7.6 mt). Of the 23.3 mt of LPG, roughly 87 per cent is consumed by the domestic segment and the remaining by the industrial and commercial segments. Around 86 per cent of the total HSD consumption is by retail consumers and the remaining by the transport and other sectors.
The per capita consumption of POL has been low in Goa and the Northeast. POL consumption has been particularly low in economically backward states that have a large population.
The future growth in POL consumption is likely to emanate from the northern and central parts of the country. The two major drivers for POL demand will be an increase in disposable incomes and higher economic growth. These drivers will aid in increasing consumption as well as the consumer base, which will also drive volumes.
The demand push provided by these factors will need to be supplemented by a supply push as the growing demand will require greater capacity at existing ports and the development of new ports to be mapped with consumers and refineries. The need of the hour is implementation of new port infrastructure,
especially on the east coast, coupled with seamless and cost-effective hinterland connectivity. The growth in POL traffic will also create demand for LNG terminals at ports and connectivity infrastructure such as pipelines, railways, waterways and roads.
Based on a presentation by Anand V. Sharma, Director, Mantrana Maritime Advisory, at a recent India Infrastructure conference