Indian Ports see shipping fuel demand jump as much as 25%

Demand for shipping fuel at major Indian ports has climbed in the past week by up to 25 per cent as the cost of refuelling at Singapore, Asia's bunkering hub, soared following the collapse of the world's leading supplier, traders said.

The announcement of OW Bunker's – the Danish shipping fuel supplier filing for bankruptcy drove up shipping fuel prices in Singapore - one of the cheapest ports in Asia in which to refuel - to their highest in more than two years as oil supplies tightened due to credit worries.

Marine fuel prices in Mumbai, India's largest bunkering port, were still around $15 a tonne higher than in Singapore on a delivered basis, but a Singapore-based trader said ship owners could be interested in bunkering in India when the price difference between Fujairah, United Arab Emirates, and Singapore narrows.

Fujairah, which is one of the busiest ports in the world, is closer to India and may be taken as a price reference.

The price difference between Fujairah and Singapore has flipped into a discount of more than $10 since late last week.

“I'm seeing about 20-25 percent more demand month on month," said a trader who sells fuel in India. "But (buyers) are also just watching the prices, as the market is still volatile, so they are trying to delay their purchases."

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India – West Africa Trade increased 15 times since 2003

Krishnapatnam Port Container Terminal (KPCT), located 30 km from Nellore, has been focusing its attention on the Ivory Coast to operate cargo services to Ports of San Pedro and Abidjan (West Africa). According to KPCT officials, India’s trade with West Africa has increased 15 times since 2003. Rice being the main export is followed by pharmaceutical products, machinery, articles of iron, chemicals, plastics, rubber and vehicles. Over 69% of India’s cashew imports go to Ivory Coast, Guinea-Bissau, Benin and Ghana.

 

Trade takes place largely from two important ports of San Pedro and Abidjan. As both the economies of India and Ivory Coast are poised to grow, KPCT is keen on becoming East India gateway for the two countries. As a first step, Krishnapatnam Port Container Terminal organised a trade meet in Abidjan recently to have a mutual dialogue for bilateral trade development. Importers of raw cashew, teak wood, metal scrap and exporters of pharmaceuticals, transport equipment, engineering goods, steel, rice, cotton yarn, besides logistics service providers and export-import trade associations attended the meet in large numbers.

 

They were familiarised with the infrastructure and operational advantages of KPCT and the ease of shipping containerised cargo owing to tariff flexibility, connectivity to cashew and timber processing units in the hinterland, various vessel services connecting KPCT with Abidjan and future trade potential benefiting West African countries. The traders involved in cashew import were impressed when the KPCT delegation presented the advantages of connectivity with Krishnapatnam.

 

KPCT pointed to saving additional cost through truck movement from Krishnapatnam Port to the final place of delivery in Andhra Pradesh. KPCT also offered additional free demurrage time (up to 14 days) on a case-to-case basis through respective lines, closed warehouse facility to enable stuffing/de-stuffing inside the warehouse,  24/7 storage and handling of cargo besides cargo storage at free of cost up to 15 days.

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Ministry of Shipping's guidelines on priority berthing of Coastal Vessels at Major Ports

A Committee was set up by the Ministry of Shipping, based on the recommendation to review the extant guidelines on priority berthing to coastal vessels, the following guidelines on according priority berthing to coastal vessels have been issued for compliance by Major Ports. A, "coastal vessel" shall mean any vessel exclusively employed in trading between any port or place in India to any other port or place in India having a valid coastal licence issued by the Director-General of Shipping/competent authority.

In addition, TAMP, in a notification, has prescribed the following conditions under which other foreign going vessels will be treated as coastal vessels:

(a) A foreign going vessel of Indian flag having a General Trading Licence can convert to coastal run on the basis of a Customs Conversion Order.

(b) A foreign going vessel of foreign flag can convert to coastal run on the basis of a Coastal Voyage Licence issued by the Director-General of Shipping.

(c) ln cases of such conversion, coastal rates shall be chargeable by the load port from the time the vessel starts loading coastal goods.

(d) In cases of such conversion, coastal rates shall be chargeable only till the vessel completes discharging operation; immediately thereafter, foreign going rates shall be chargeable by the discharge ports.

 

Major Ports shall accord priority berthing, at least on one berth, to dry bulk/general cargo coastal vessels, to enable shippers to transport goods from one port to another port in India irrespective of origin and final destination of the cargo. This would be in addition to dedicated berth, for handling of coastal thermal coal already existing in Major Ports, if any.

 

All Major Ports shall accord priority berthing through specific window to coastal container vessels keeping in view the concession agreements and existing allotment of window berthing at the private terminals and availability of container berths operated by the ports.

 

In respect of POL/liquid cargo tankers, existing practices regarding such priorities as prevalent in various ports may continue.

 

Coastal vessels which are being accorded priority berthing shall not be liable to pay priority berthing charges.

 

There will be no restrictions on berthing of coastal vessel, in addition to the coastal vessel berthed on priority as above, if the same is eligible under normal berthing policy of the Port.

 

A coastal vessel shall be liable to pay port charges on coastal rates notwithstanding whether it was berthed on priority or otherwise.

 

Ports should explore the possibilities of earmarking exclusive berths, storage areas and gates for coastal cargo outside the Custom bonded area to further facilitate movement of coastal cargoes.

 

Major Ports shall clearly work out the time limit within which a coastal vessel would be berthed in a particular port. This time limit may differ depending on the cargo and berth.

 

Each Major Port should carry out a detailed exercise and issue a trade notice clearly indicating the upper time limit within which a coastal vessel would be given a berth in the port. As regards priority berthing through a specific window to coastal container vessels, Major Ports should have a detailed discussion with the PPP operator and publish the specific window for coastal container vessels.

 

All Major Ports shall incorporate and notify the provisions for priority berthing in these guidelines in their respective Berthing Policy and Scale of Rates.

 

The MIS in the Port should capture data for coastal and foreign vessels/cargoes separately. The data so captured shall be monitored and reported internally in the Port as well as to IPA and Ministry in separate format for coastal and foreign vessels.

 

These guidelines are issued in supersession of all other guidelines issued earlier on the subject and shall be complied with by all Major Ports, according to the Ministry of Shipping.

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How does Steel Scrap contribute to the Steel Economy?

Steel scrap from the demolished ships is a major source of raw material for the re-rolling mills in our country. Normally at least 70 % of the total light displacement tonnage of a ship broken constitutes of re-rollable scrap. These are converted into bars and rods that are used in the construction sector. The other raw materials to produce bars and rods are re-rollable scrap from railways, pencil ingots from induction furnaces, semis from the integrated plants and imported re-rollable scrap.

Scrap from ship breaking fetches a very good price in the market. If prices express consumer preference, then there is a strong preference for the ship-recycling scrap. This is because of the high quality of steel that comes in the form of re-rollable scrap from ships. Ships are manufactured with acute specifications. The manufacture of ships is done usually in the developed countries and the specifications are monitored closely in order to avoid accidents. The general features of steels that are used to manufacture ships are ability to withstand pressure, high impact and strain on account of severe cold. These features if translated into manufacture of bars and rods may give us similar qualities of steel with equal strength.

The material processed from ship breaking scrap is better in terms of yield strength, notch impact strength and through thickness ductility. In terms of chemical composition it is consistent and has low sulphur and phosphorus content. In terms of metallurgical properties, steel from ships are normalized, fully killed and has finer and more compact grain structure, free from inclusions, pores and cracks and austenitic properties. Hence for all kinds of applications those require impact resistance, corrosion resistance, machinability, bendability, and formability, steel from ship breaking scrap has been found to be more suitable than steel from ingots and billets. Incidentally, everywhere else in the world the scrap from the demolished ships are usually sent into melting furnaces, India is probably only country that has the technique of re-rolling scrap into producing construction steel without having to first cast scrap as billets and ingots.

In order to produce a tonne of steel through the integrated steel plants one tends to consume more power and fuel and non-replenishable resources like coal, iron ore and limestone and other minerals. The sunk costs in terms of capital employed are higher in the integrated steel plants and the integrated plants create far less employment. Indeed, we can obtain our required input material from the ship recycling industry at a fraction of the costs of the integrated plants.

Steel Produced via Ship breaking route vis-à-vis other route. Capital investment required for producing 2 million tons of steel through ship-recycling route will not be more than INR. 300 crore as compared to over INR. 6000 crore required via alternative route. Solid waste generation in ship recycling is negligible as compared to major steel plants. During its peak on 1999-2000, it was producing more than 2 million tons of re-rolling steel per annum.

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Directorate General of Foreign Trade

The Directorate General of Foreign Trade (DGFT) is the agency of the Ministry of Commerce and Industry of the Government of India responsible for administering laws regarding foreign trade and foreign investment in India. DGFT provides a complete search-able database of all exporters and importers of India. The search can be completed only if full IEC (Importer Exporter Code) code and first three letters of company name are entered.

The Directorate General of foreign Trade (DGFT) is the agency of the Ministry of Commerce and Industry of the Government of India, responsible for execution of the import and export Policies of India. It was earlier known as Chief Controller of Imports & Exports (CCI&E) till 1991. DGFT plays a very important role in the development of trading relations with various other nations and thus help in improving not only the economic growth but also provides a certain impetus needed in the trade industry. For promoting exports and imports DGFT establish its regional offices across the country.

Directorate General of Foreign Trade is an attached office of the Department of Commerce, Ministry of Commerce and Industry. It’s headquartered in Udyog Bhavan, New Delhi. Under its jurisdiction, there are four Zonal Offices at Delhi, Mumbai, Kolkata and Chennai headed by Zonal Joint Director General of Foreign Trade. There are 35 Regional Authorities all over the country.

Functions of DGFT:

Some of the major functions of DGFT and its regional offices through out the country are as follows:

·       To implement the Exim Policy or Foreign Trade Policy of India by introducing various schemes and guidelines through its network of DGFT regional offices thought-out the country. DGFT perform its functions in coordination with state governments and all the other departments of Ministry of Commerce and Industry, Government of India.

·       To Grant Exporter Importer Code Number to Indian Exporter and Importers. IEC Number is a unique 10 digit code required by the traders or manufacturers for the purpose of import and export in India. DGFT  IEC Codes are mandatory for carrying out import export trade operations and enable companies to acquire benefits on their imports/exports, Indian customs, export promotion councils council etc., in India.

·        DGFT permits or regulate Transit of Goods from India or to countries adjacent to India in accordance with the bilateral treaties between India and other countries.

·        To promote trade with neighbouring countries.

·        To grant the permission of free export in Export Policy Schedule 2.

·        DGFT also play an important role in controlling DEPB Rates.

·        Setting standard input-output norms is also controlled by the DGFT.

·        Any changes or formulation or addition of new codes in ITC-HS Codes are also carried out by DGFT.

      Apart from the above, DGFT also acts as a trade facilitator. It also deals with quality complaints of the foreign buyers. Officials DGFT works in close co-ordination with other related economic offices like Customs Commissionerates, Central Excise authorities, DRI authorities and Enforcement Directorate. 

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India, Russia agree to boost Economic and Trade Ties

Ahead of the bilateral summit between Prime Minister Narendra Modi and Russian President Vladimir Putin in December, both countries held the 20th India-Russia Inter-Governmental Commission Meeting on Trade, Economic, Scientific, Technological and Cultural Cooperation here at New Delhi. The meeting was co-chaired by External Affairs Minister Sushma Swaraj and Russian Deputy Prime Minister Dmitry Rogozin.

 

Rogozin also met Prime Minister Modi who said India attached very high importance to its "time-tested" and special strategic partnership with Russia. Modi also said he was looking forward to the visit of Putin to India for the Annual Summit. "The visit would provide an opportunity to take forward the bilateral relations to a new level," he said.

 

The Inter-Governmental Commission took note of important outstanding issues requiring immediate attention and recommended early resolution of such issues amicably in tune with the spirit of traditional friendship and mutual trust between the two countries, said an official statement.

 

Swaraj and Rogzin decided to set a joint study group for the proposed agreement between India and the Customs Union of Belarus, Kazakhstan and the Russian Federation for trade in goods and services; Enhancement of bilateral trade through the International North South Corridor Project (INSTC) by freight forwarders and exporters particularly to bolster trade in agriculture and food processing industry. It was also decided to maintain the momentum of cooperation in some priority areas such as hydrocarbons, coking coal, fertilizers, mining, civil aviation, infrastructure and trade in rough diamonds.

 

Another decision was for joint cooperation between Indian company National Mineral Development Corporation (NMDC) and the Russian company ACRON for development of potassium and magnesium deposits in Talitsky mine in Perm region of Russia and Partomchorr apatite-nepheline ore deposit (Murmansk region), the statement said.

 

At a separate event, Commerce and Industry Minister Nirmala Sitharaman said India was for greater market access to the Russian market for its products and also invited investments into areas such as railways and defence.

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India to develop Iran’s Chabahar Port in Iran

Last week, the cabinet led by Prime Minister Narendra Modi approved the framework for India’s participation in developing Iran’s Chabahar port with an investment of $85.21 million, clearing the decks for two of the country’s biggest state-owned ports to venture overseas for the first time.

According to plans, Jawaharlal Nehru Port Trust and Kandla Port Trust will form a joint venture (JV) or an appropriate special purpose vehicle to lease two fully constructed berths in the first phase of the Chabahar port project for 10 years, which could be renewed by “mutual agreement”. The JV will invest the money for equipping the two berths within 12 months, one as a container terminal and the second as a multi-purpose cargo terminal.

The Indian side will transfer ownership of the equipment to be provided through the investment to Iran’s Ports and Maritime Organisation (P&MO) without any payment at the end of the 10th year. The Indian and Iranian sides could enter into subsequent negotiations for participation in the construction, equipping and operating of terminals in phase-II development of Chabahar port on a build, operate and transfer (BOT) basis, subject to the Indian side’s satisfactory performance in phase I. The Iranian side will make efforts to provide free trade zone conditions and facilities at the port. India has decided to invest in developing Chabahar port, which is considered strategically and economically important for the country’s exports to landlocked Afghanistan.

"We are setting up a port in Chabahar, Iran. We will complete the port in about one-and-a-half years," Road Transport and Shipping Minister Nitin Gadkari said here. The port will be used to ship crude oil and urea, saving the country in transportation cost. "If we produce urea there then we can get urea at 50 per cent lesser cost and would not need to provide subsidy on it," he said. The port of Chabahar in southeast Iran is central to India's efforts to open up a route to landlocked Afghanistan circumventing Pakistan.

Chabahar is also closer to India than the existing Iranian port at Bandar Abbas, which is about 380 nautical miles away from Chabahar. India’s presence at the Chabahar port—which lies outside the Persian Gulf and is easily accessed from India’s western coast—would give it a sea-land access route into Afghanistan through Iran’s eastern borders.

Though the opportunity to develop Chabahar port has come through a government-to-government agreement between the two nations, it is a foundation that has the potential to propel India’s state-owned ports to look for a larger footprint globally.

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Adani Group lays foundation stone for Adani Ennore Container Terminal

Adani Ports & SEZ Ltd, India's largest port developer and part of Adani Group, announced that Minister for Transport and Rural Development (Road Transport, Highways, and Shipping) Mr. Nitin Gadkari, had laid the foundation stone for the INR. 1,270 crore container terminal at Kamarajar Port (Ennore) on Monday, 3rd November 2014.

The company has entered into a 37% revenue sharing agreement with the Port management for this project and this is considered to be one of the highest in the industry in the recent times. The terminal, which will be constructed in two phases, is expected to be commissioned in March 2016.

Kamarajar Port's Chairman and Managing Director M.A. Bhaskarachar said that while ADANI Ennore Container Terminal Pvt. Ltd, company floated by Adani Ports and SEZ Ltd, will invest INR. 1,270 crore to construct berths and procure equipments, the Port will invest around INR. 300 crore in dredging and to create rail and road networks. He added that the terminal which will come in 36.5 hectares of land will have two berths and first one will be ready in 24 months, while the second berth will be ready in 27 months. On completion, it will be a 730 meter terminal, with 31.5 hectares of back area, and capable of handling 1.4 million TEUs annually. It will be South India's first e-terminal and all-electric facility, offering paper-less operations and direct linkage with CFS and lines through Web Access and Automatic Gates, allowing seamless transit from CFS to the container yard. 

Speaking on the occasion, Mr. Gautam Adani, Chairman, Adani Group, said, “We are very pleased to have Shri. Nitin Gadkari lay the foundation stone for Adani Ennore Container Terminal. This new container terminal will be a world-class facility, comprising of the latest technology & equipment, and highly motivated workforce. The resultant operational efficiency is sure to provide great value to the southern region of India.”

This world-class terminal will initially have four units of 65 tonne capacity Post Panamax Twin Lift Quay Cranes, with three units of 65 tonne capacity Super Post Panamax Twin Lift Quay Cranes added in the second phase. The yard equipment will initially include twelve 41 tonne lift rubber tyred container gantry cranes, which will accommodate seven rows of containers, with nine more cranes added in the second phase.

'We will increase the depth to 20 m, so that bigger vessels can call at Ennore', said Mr. Nitin Gadkari, Minister for Transport and Rural Development (Road Transport, Highways, and Shipping) in his address.

Adani Ports & SEZ signed the concession agreement to set up this container terminal in March 2014. By successfully commissioning the terminal in March 2016, the company will reiterate its ability to execute large scale infrastructure projects in record time, with world-class build quality and exceptional operational efficiency.

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India-Vietnam sign crucial agreements: PM Modi stresses on Importance of Ties

India and Vietnam signed many crucial agreements during the recent visit of Vietnam’s Prime Minister Nguyen Tan Dung. PM Modi invited the Vietnamese companies to join the accelerated economic growth programme 'Make in India' for reaping the benefits of this new initiative. They agreed to utilize the Customs Cooperation Agreement and Maritime Shipping Agreement between the two countries for facilitating more intensive economic engagement.

PM Modi said that India's defence cooperation with Vietnam is among the most important ones. "India remains committed to the modernization of Vietnam's defence and security forces. This will include expansion of our training programme, which is already very substantial, joint exercises and cooperation in defence equipment," he said. "We will quickly operationalise the 100 million dollars Line of Credit that will enable Vietnam acquire new naval vessels from India. We have also agreed to enhance our security cooperation, including in counter-terrorism," he added.

Applauding the people of Vietnam, Modi said, "We are two developing nations. We have been steadfast in our support for each other and we have stood with each other in difficult moments. We in India admire the people of Vietnam for the courage and resolve with which they have overcome many formidable challenges to their nation."

"We have also agreed to increase our cooperation in Space, including in space applications and launch of Vietnam's satellites, and in peaceful uses of civil nuclear energy" he said. "We emphasized the need for stronger economic relationship as an essential component of a strong strategic partnership. We see great opportunities for increased trade and enhanced Indian participation in areas such energy, infrastructure, textiles, chemicals, machinery, agro-processing and information technology in Vietnam. We have offered to discuss additional lines of credit to support Vietnam's efforts to diversify its industry and economic linkages," Modi elaborated.

"Today, our partnership is important for promoting our nations' prosperity and essential for advancing peace and stability in our shared neighbourhood. We have shared interest in maritime security, including freedom of navigation and commerce and peaceful settlement of maritime disputes in accordance with international law," Modi stressed.

"Since entering office, my government has promptly and purposefully intensified our engagement in the Asia Pacific region, which is critical to India's future. It is no surprise that Vietnam has been at the forefront of our efforts," Modi said.

Trade between India and Vietnam has been steadily growing since independence. Further there is good cooperation in Offshore, Oil & Gas exploration and production. Recently further offshore blocks have been added for exploration and production. These developments augur well for the Indian Shipping and Offshore Industry.

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