DEMAND AND TRAFFIC ANALYSIS

Project Changes In Long-term Cargo Composition

Major ports in India:

• Kandla port handled the maximum POL traffic followed by Mumbai port and New Mangalore port• Traffic is largely driven by the rising demand in Oil Imports• Paradip, Ennore and Vizag ports together handle about 59% of the coal traffic • IOC is the major importer of POL and crude

Commodity Composition Of Indian Ports 2011-12 (%)

Coal: 17%POL: 37%IronOre: 11%Container: 16%Others: 15%

Traffic Projections for 11th five year plan and its implementation

• The traffic projections made for terminal year 2011-12 was 708.09 and 300.86

million tonnes for major ports and non-major ports respectively

• The actual traffic was 970.60 million tonnes against the 11th plan terminal

projection of 1008.95 million tonnes, showing a shortfall in traffic of 38.35 million

tonnes

• In the last five years, the cargo composition at Indian ports has remained

unchanged, except for Iron Ore

• Petroleum oil Lubricants hold the largest share in total traffic at Indian ports, with

a share of 37% in 2012-13 compared to 36% in 2007-08

•The share of Iron Ore has declined from 18% to 11% during 2007-13 period due to the

ban on exports from some locations and increase in export duty. Earlier there was a

decline of 70% of Iron Ore exports, i.e. from 61.74 million tonnes in 2011-12 to 18 million

tonnes in 2012-13 resulting in a loss $10 billion in the last financial year which is directly

affecting the steel industry as Iron Ore is the main ingredient in steel making

• The capacity of major ports has been increased in the last five year plan, as it was

504.75 million tonnes at the end of 10th five-year plan which has been increased to

702.80 million tonnes in 2012-13

Finance Outlay

• The total plan outlay for the 11th plan was Rs. 30305.16 crore comprising of Rs.

3749.00 crore as Gross Budgetary Support and Rs. 26556.16 crore through internal

and external resource generation of ports/organizations

• The Government’s support to the central plan is called Gross Budgetary Support.

It includes the tax receipts and other sources of revenue raised by the Government.

The planning commission aggregates and puts forward the demand by various

administrative ministries to the finance ministry for the Budgetary support required

from the government. This demand is first verified and then approved by the

finance ministry

Projected Commodity Composition (2016-17)

Coal: 25%POL: 27%Iron Ore: 11%Container: 21%Others: 14%

Traffic forecasting for the 12th five-year plan

• By the end of the Twelfth five year plan, the cargo traffic at Indian ports is expected to

touch 1,758 million tonnes, increasing at a CAGR of 13%

• In this the share of Petroleum and Oil Lubricants (POL) is expected to fall, while that of

coal and containers is expected to increase

• Growing domestic requirements of Coal for Power and other sectors, crude oil for

domestic petroleum requirements will require better and high volume seaports

Petroleum Oil Lubricants

• During 2008-13 the total POL traffic handled by major ports increased at a CAGR of

1.39%, i.e. from 176 mt in 2008-09 to 186 million tonnes in 2011-12

• The share of POL at major ports was 34% during 2012-13

• Kandla port has the major share of POL cargo which is 54 million tonnes, followed

by Mumbai at 35 million tonnes and New Mangalore at 24 million tonnes

• Crude oil imports increased from 144 million tonnes in 2007-08 to 187 million

tonnes in 2011-12, CAGR of 7%

• According to planning commission the demand of POL is estimated to increase to

189 million tonnes by 2016-17, and increase of 5% in CAGR

• The total of POL traffic (including liquefied natural gas ) transported by Indian ports

is expected to cross 480 million tonnes by 2016-17

Coal• During the five year period 2008-09 to 2012-13, coal traffic at major ports increased

at a CAGR of 5%. At present 16% of the Seaport traffic is of Coal

• In 2012-13, coal traffic was 87 million tonnes, growth of 11% over the last fiscal year

• Overall, coal capacity worth $25 billion lies on the major ports with 66 million

tonnes of coal being transported, the maximum at Ennore port near Chennai

• The planning commission has estimated total coal requirements to grow at a CAGR

of 13% during twelfth five year plan. Domestic supply is expected to increase at a

CAGR of 7.2% and coal imports will increase at 11.8% during 2012-17

• The gap between coal requirements and the availability of coal is expected to

increase at a CAGR of 38% during the twelfth plan. Import of coal for thermal power

plants is expected to increase at a CAGR of 37%, i.e. from 45 million tonnes to 161

million tonnes in 2016-17 and out of this about 60% is expected to be imported

through western ports and the remaining from the eastern ports.

Iron Ore

• The iron ore traffic has been hit hard in India due to the restrictions imposed on

mining in Bellary, Hospet, Goa and as well a hike in export duty on iron ore

• From 2008 to 2013 iron ore traffic showed mixed trends. It reached 100 million

tonnes in 2009-10 and it fell to 27 million tonnes at major ports in 2012-13

• 8 berths are dedicated to the transportation of of iron ore at major ports

• Iron ore capacity at major ports is 80 million tonnes with maximum at Mormugao

port, Goa

• According to Planning commission the total iron ore traffic in Indian ports is

expected to be between 150-190 million tonnes if the ban gets lifted

ConclusionTraffic at Indian ports is expected to be 1,758 million tonnes by 2016-17, an

increase at a CAGR of 13.25% of which 54% will be handled by major ports and

between 2013-17, the traffic at non major ports is expected to increase at a CAGR

of 16%.

• POL will account for 27% of total traffic in 2016-17, followed by coal at 25%,

containers at 21%, iron ore at 11%, fertilizers at 2%

• The cargo handling capacity of Indian ports is expected to touch 2,289 million

tonnes by 2016-17, POL will have a capacity of 600 million tonnes

• The medium and long term outlook for port traffic looks strong. Non major ports

will witness higher traffic growth in comparison to major ports

• The global scenario and domestic issues of regulation in mining, pace of projects

implementation and policy revision are expected to play important role in trade

growth