Business Bureau :
The Indian port sector has been adversely impacted due to the COVID-19 pandemic and the subsequent lockdown, and it is likely to witness 5-8 per cent contraction in cargo volumes, rating agency ICRA said on Monday. Although the sector has been classified under essential services and has remained operational during the lockdown, the pandemic's adverse impact on domestic economic activity as well as slowdown in global trade have resulted in steep contraction in the cargo volumes at major ports, it said.
“ICRA expects that while general cargo throughput may witness 5-8 per cent contraction for full year 2020-21, the container segment may witness a decline of 12-15 per cent during FY21,” it said. The rating agency said that similar to the 22 per cent decline in April 2020, May 2020 also saw a 22 per cent decline in throughput, and while the decline was across major cargo categories, segments such as petroleum, oil and lubricant (POL), thermal coal and container witnessed significant contraction.
Ankit Patel, vice-president and co-head at ICRA Ratings, said, “The recovery in the port sector will be contingent on the pace of recovery of the domestic industrial activity and the global economy. Further, factors like changes in global supply chain pattern during the recovery phase will also have an impact on the cargo profile, he said adding that of late, anti-China sentiment has also been building up momentum, which could also be a headwind for the trade growth.” The full-year outlook for the sector remains negative, with volume contraction expected in 2020-21, Patel said adding that the recovery among the cargo segments should be relatively better for essential products like POL and thermal coal, which should be in line with lockdown relaxations and the pick-up in domestic economic activity, while for segments like coking coal and containers, the recovery may be long drawn.