Trade Tensions, Elections Keep Cargo Volumes Subdued In May

Cargo handled by Indian ports in May declined for the first time in the last three months due to U.S.-China trade tensions and India’s general election, according to data from a Goldman Sachs report.

Ports across the country handled 591.8 lakh tonnes of cargo in May, a decline of 0.4 percent over the last year, according to data compiled from the Indian Ports Association’s website and a report by the investment bank. The decline in shipments was due to weak fertiliser and coal volumes, which was partly offset by a pick-up seen in liquid, iron ore and container volumes.

Fertiliser volumes declined for the second consecutive month, albeit at a lower rate, while coal volumes declined for the first time in the last four months. Fertiliser and coal volumes in May declined 22 percent and 8.5 percent respectively on a yearly basis.

Liquid cargo—oil and gas-related products—volumes grew nearly 4 percent, the lowest in the last three months. Iron ore volumes grew 28 percent—the highest in the last 11 months—after five months of deceleration.

Container volumes, which grew 9.2 percent on a yearly basis, will continue to benefit Adani Ports And Special Economic Zone Ltd. and Container Corporation of India Ltd., Goldman Sachs said. While volumes in May were under-encouraging, Goldman Sachs expects port volumes to improve for the rest of the year as economic activity picks up.