Deendayal Port Authority is banking on resumption in rice exports and other initiatives to wrest top slot from Paradip Port this year.

MUMBAI: In just a month after the government lifted curbs on rice exports, state- owned Deendayal Port Authority which runs the port at Kandla in Gujarat, is seeing a huge traction in rice loading with at least 16 ships idling at the port’s outer anchorage waiting for berth to pick up the grain.

On 22 October, the government removed all curbs on rice exports that were introduced in September 2022.

It scrapped the 10 percent Customs Duty on parboiled rice, husked (brown) rice and rice in the husk (paddy or rough) with effect from 22 October and removed the $490 per ton minimum export price (MEP) on white rice.

Earlier in September, the government cut the export duty on non- basmati parboiled rice, husked (brown) rice and rice in the husk (paddy or rough) to 10 percent from 20 percent with immediate effect. Besides, semi-milled or wholly milled rice, whether or not polished or glazed (other than parboiled rice and Basmati rice) was allowed duty-free.

The ban resulted in India’s non-basmati rice exports dropping to 11.12 million tonnes (mt) in FY24 from 17.79 mt in FY23.

After the export curbs on rice were lifted, 16 vessels are currently waiting at the outer anchorage of Deendayal Port one of India’s biggest rice exporting ports – for a berth to load rice cargo, said a shipping industry executive based in Kandla. A few days ago, as many as 18 ships were idling in the outer anchorage, waiting for berthing.

With Deendayal Port Authority not in a position to give berths to all ships simultaneously, it decided to encourage loading of rice from barges onto ships waiting at the anchorage by offering concessions to barge operators.

“For loading rice in a barge and taking the barge to the anchorage for further loading onto ships, Deendayal Port Authority is offering concessions in berth hire charges to barge operators to cut the waiting time for ships at the anchorage,” the shipping industry executive said.

One vessel was loaded with rice through this method and another two ships are being loaded in this manner, he said.

Instead of ships coming to the berths for loading rice, barges carrying rice will go and load onto the ships for which the port authority is offering concessions.

Aside the concessions to barge operators and reduced waiting time for ships at the anchorage, the barge loading method is also advantageous for the ships.

“If the ships dock at the berths, they have to pay port dues, berth hire and pilotage. With barge loading, pilotage services are not required and since they are not berthing, berth hire charges are not applicable, resulting in cost savings. Barge operators also benefit from the concessions,” the industry executive said.

There are some 40 barges operating at Deendayal Port, with capacities ranging from 300 tons to 3,000 tonnes.

It takes about one hour for a barge to travel from the port to the anchorage and another 10-12 hours for loading depending on the size of the ship.

Deendayal Port Authority is banking on the resumption in rice exports to wrest the Nol position in cargo handling among state-owned ports, which it ceded to compatriot Paradip Port Authority last year after a 16- year reign.

In FY24, Deendayal Port Authority handled 132.3 mt of cargo while Paradip Port Authority clocked 145 mt.

Deendayal Port Authority was lagging behind Paradip Port Authority by about 3.5 mt, for a long time, since the fiscal year began in April.

But, with some deft moves, Deendayal Port Authority has managed to narrow the gap to some 1.5 mt and hopes to overtake Paradip Port Authority by the end of November, sources said.

Till 21 November, Deendayal Port Authority handled 91.12 mt while Paradip Port Authority was slightly ahead at 92.74 mt, a gap of 1.62 mt. Deendayal Port Authority has to handle some 4.4 lakh tonnes of cargo a day till 31 March 2025 to reach 150 mt in FY25. This daily target is considered realistic as the port authority has been handling about 5 lakh tonnes a day and sometimes even 6 lakh tonnes a day since April.

To attract more cargo, Deendayal Port Authority has offered concessions to trade for shipping coal, coke and salt cargo in bigger parcels ranging from 50,000 tonnes to more than 70,000 tonnes.

“The concession is being extended vessel wise and that is a big advantage to the trade,” the industry official said.

Further the port authority is offering concessions in stock yard rates and demurrage charges.

Previously, the demurrage (penalty for overstaying beyond a stipulated period) was levied on a per gross registered tonnage (GRT) basis, which is now collected on a per hour basis. Port users are getting advantage with this change, helping the port authority attract more ship calls.

Fertilizer shipments another big cargo segment – through Deendayal

Port has also gained momentum with the government resuming subsidy for fertiliser imports from October after a short gap.

“When the subsidy was not available, importers were not shipping large volumes. Now they are moving huge quantities of fertilisers,” the industry executive added.

The port authority has also started marketing the port to container lines and inland container depot (ICD) operators such as the one run by Gateway Distriparks at Viramgam near Ahmedabad to grow its container cargo business, a segment in which it is nowhere close to rival Mundra Port located a few kilometres away.

Published Date: November 22, 2024