FFFAI calls for collaboration with Nepal Freight Forwarders Association to increase bilateral trade

KATHMANDU : Speaking at the Silver Jubilee Celebration function of Nepal Freight Forwarders Association (NEFFA) held on July 29 at Kathmandu, Mr S Ramakrishna, Chairman, Federation of Freight Forwarders’ Associations in India (FFFAI) urged for greater collaboration between FFFAI and NEFFA for mutual benefits and enhancement of bilateral trade. On this occasion the FFFAI Chairman recommended the following points:
•             FFFAI and NEFFA should work together in disseminating the best practices of each Country.
•             Both the associations should boldly speak about the difficulties that each border faces and how to mitigate the same, by representing jointly to each Government for which FFFAI stands committed.
•             On the Inland water ways there should be a meeting participated by India, Nepal and Bangladesh Freight Forwarders and should give Joint proposal to all Governments to extend the treaty, which already exists with Bangladesh, to Nepal too, especially for Jogighopa and Pandu Multimodal Logistics Parks being open up in the North Eastern India.
•             Both FFFAI and NEFFA should have mutual co-operation of trust to help each other in recovery / settlement of payment issues.
Currently, freight forwarders in Nepal are showing concerns over irrational charges levied by Shipping lines operating container services between India-Nepal route, including labour charges, additional surcharges and demurrage charges resulting in increase in logistics cost.
In addition, congestion at dry ports and exorbitant registration charges to use of Government’s cargo tracking system remain other areas of concern. Earlier, on July 28 Mr Ramakrishna also attended India-Nepal Logistics Summit which was jointly organised by Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Ministry of Industry Commerce and Supplies and Maritime Gateway, in association with Nepal Freight Forwarders Association (NEFFA). At this Summit discussions were held on infrastructure developments, issues related to transit time between Nepal and Indian ports, warehousing facilities in Nepal, issues related to tariffs charged by logistics service providers and requirement of automation of customs and border clearance.

Strong Indian Coal imports bring cheer to Panamax owners : Drewry

LONDON: Foreseeable strong Indian coal imports is expected to lend continued support to rates in the panama bulk sector in the coming quarters, following already climbing rates so far this year, according to analyst Drewry.
With the Indian Government’s plan to invest heavily in infrastructure, domestic coal demand will prompt firmness in coal imports, leading to increased rates in the panama market.
“Panamax rates have skyrocketed in 2019 and are likely to rise in the coming quarters supported by strong demand for coal imports in India,” said Rahul Sharan, Dry Bulk Lead Research Analyst at Drewry.
The Baltic Panamax Index (BPI) started off at close to 1,500 points at the beginning of 2019 before dipping to just over 500 points in February. But ever since, the BPI has gained strength and risen steadily until end-June before a surge in July and closing at 1,753 points on 5 August.
India’s Finance Minister had said in early-July that the Government plans to invest $285bn annually over the next five years on infrastructure – a surge of more than 150% compared with the past investment.
The investment initiatives will result in a massive surge in demand for steel, cement and power. The spurt in demand for cement has already generated huge requirements for non-coking coal imports this year.
India’s cement production has increased to more than 337 million tonnes in FY2018-19, a rise of more than 13% from the previous financial year.
“It takes about 200 kilograms of coal to produce one tonne of cement. Therefore, to produce 337 million tonnes, the Indian cement industry consumed 67 million tonnes of coal in FY2018-19. With the new Government firmly in place with emphasis on infrastructure, the demand for cement is expected to surge over the next few years. Additionally, with increased industrial production, coal demand for power generation will also expand,” Sharan explained.
“Moreover, domestic coal production has been increasing at a very slow pace, leaving power companies to depend on coal imports. For instance, domestic coal production increased 5% until May 2019, but imports surged 29%,” he added. Hence the inability of domestic coal producers to match domestic demand will keep Indian imports high over the next few quarters.
However, Sharan pointed out that the Indian Government plans to commercialise coal mining, which will boost domestic production and cut imports.
But “this will take time and until then coal consumers will have to rely on imports for a large part of their requirements”, according to Sharan.

Gateway of opportunities opens up for Trade and Investment in J&K and Ladakh post revoking of Article 370: FIEO President

NEW DELHI: The strong will and action of the Government under the dynamic leadership of Prime Minister Shri Narendra Modi and Home Minister Shri Amit Shah to scrap Article 370 has paved a new era of growth both for the people of Jammu & Kashmir and Ladakh region said FIEO President, Mr Sharad Kumar Saraf. Scrapping Article 370 will not only bring in huge trade and business opportunities for both the regions but will also help get the troubled region  to stand on its feet added Mr Saraf.
FIEO Chief said that this bold step taken by the Government at the Centre would allow flow of investments into the state in sectors like tourism, real estate, carpets, handicrafts, sports goods, horticulture and food processing and will also help in promoting trade and commerce specially exports of these products and services from the region. Jammu and Kashmir including Ladakh region are an area of strong potential for development as it enjoys a range of natural resources and immense talent. Strong and dedicated efforts from the Government, trade and industry including handholding of local businesses is the need of the hour today to further help to push its growth rate and create new jobs and livelihoods in the region said Mr Sharad Kumar Saraf. This multiplier effect would increase the employment opportunities and contribute to India's overall prosperity and growth & development of the country.
FIEO President further adds that opportunities, which exists in the other key sectors also includes pharmaceuticals, IT/ITeS, electronics and leather. Shortcomings with regard to post-harvest food processing of apples, saffron, almond, walnut and other fruits and dry fruits, as well as the acute lack of health care and educational facilities in the state mainly due to lack of private sector participation will soon be overcome by this bold step taken by the Government.
With this FIEO also plans to provide handholding to cater to the needs of the exporting community of both the region of J&K and Ladakh.
Mr Sharad Kumar Saraf further says that now with both Article 370 and 35A gone, J&K will be governed by the same rules as the rest of the Country, which means any Indian citizen can buy property in the State, take up a job and most importantly, invest in industry and trade initiatives in the State. Truly a historic decision as it opens the gateway for development and peace in Jammu and Kashmir, said a FIEO release.

Trade suspension will hit Pakistan, not India: Traders & FIEO

NEW DELHI: Islamabad’s decision to suspend trade with New Delhi will hit Pakistan not India due to latter’s low dependence on exports to its neighbour, officials and traders have said.
In a new low in bilateral trade relations, Pakistan Prime Minister Imran Khan has decided to suspend trade relations with India in a five-point plan, in response to India’s move to end special status for Jammu & Kashmir and split it into two Union Territories.
“Trade was practically closed for sometime. So, there will be no impact especially on agricultural products,” said an official.
In the first quarter of FY20, India’s exports to Pakistan were $452.5 million and imports were $7.13 million. In FY19, total exports to Pakistan were $2.06 billion, while imports were $495 million.
“The suspension of trade relations will hit Pakistan more as our exports to them have a very limited profile because they did not give us MFN status and violated global trade rules,” said Ajay Sahai, Director General, Federation of Indian Export Organisations.
India’s major items of export are organic chemicals, cotton, plastics and dyes, while imports are fruit and edible nuts, and mineral fuels. Export of tomatoes to Pakistan had stopped long ago.
Sahai explained that such goods have a ready market in South Asia and Middle East which will enable India to divert such exports immediately without much cost.
“This is a unilateral move and a unilateral loss,” said Mohit Singla, Chairman, Trade Promotion Council of India. A Delhi-based exporter said that trade through Dubai remains open.
However, Sahai added that shipments in the pipeline will take a hit and it is not clear whether the goods in transit or lying at the ports would be recalled in such a deteriorating situation.

Calcutta Freight Brokers Association held its 81st AGM

Chief Guest, Mr. Steve M. Felder, Managing Director - South Asia, Maersk India reaffirms his committment to  deliver best-in-class logistics solutions
KOLKATA: The Calcutta Freight Brokers Association (CFBA) recently held its 81st Annual General Meeting at Bengal Chamber of Commerce, Kolkata on July 12, 2019.
Shri VIVEK CHOUDHARY, Chairman of the Calcutta Freight Brokers, in his speech, welcomed Chief Guest, Mr. Steve M. Felder, Managing Director South Asia, Maersk India Pvt Ltd., and other distinguished guests from shipping lines and freight forwarding business. He also thanked the members of the Bombay Overseas Freight Broker's Association Shri Anup Deosthalee and Shri Jayesh Gandhi.
While giving a brief overview of the International Container trade and the shipping industry, the Chairman said, “Today's container market is confronting more than its fair share of headwinds. There have been concerns of a slowing global economy stoked by the ongoing US-China Trade War.”
While talking about the home port, he focussed on the performance of Kolkata Port Trust. “In 2018-2019, the TEUs handled by the port showed a growth of 4.18 %, from 7,96,211 TEUs to 8,29,482 TEUs.
Seeking the long pending demand from shipping lines, the CFBA Chairman said, “The focus of the Association continued towards building up healthier partnerships with the shipping companies in order to jointly address issues of mutual interest. Expansion of service portfolios for the clients and focus towards customer satisfaction would be primary importance going ahead. It was felt necessary that BOFBA and CFBA work hand in hand towards addressing the brokerage issues jointly with the shipping companies,” Mr Choudhary said.
“The committee  has been in regular contact with all major shipping lines in an effort to realign services in the changing scenario in order to ensure regular brokerage returns. The committee has been closely following up with the shipping lines and updating members on status of brokerage payments,” the CFBA Chairman said.
Praising Calcutta Freight Brokers' contribution towards logistics growth of East India, Chief Guest of the evening, Mr. Steve M. Felder, Managing Director - South Asia, Maersk India Pvt Ltd., pointed out that “ India is both exciting from a production and a consumption perspective, and on the latter, it is worth noting that it is now the World's 3rd largest consumer market, expecting to reach $6 trillion by 2030.”
Focussing on India's economic scenario, Maersk India Chief said, “The Government of India has progressed multiple initiatives aimed at improving the Ease of Doing Business, also buoyed by major GST reforms and a new insolvency act.”
Highlighting on the present scenario in India's maritime trade, Mr. Steve said, “The relaxation of longstanding cabotage restrictions has enabled shipping lines to more effectively address positioning of empty containers to deficit locations, thereby enabling Indian exporters to consistently connect to markets around the world; and for Indian ports to equitably compete with key transhipment hubs in the broader region.
Talking on India's port sector and shipping services by Maersk Line, the Maersk India Chief said, “The advent of additional port capacity on both coasts, as part of the Sagarmala initiative, has resulted in a near-eradication of congestion in most ports, enabling Maersk to achieve record schedule reliability, and position India with headroom to grow in the future. It is noteworthy that India now enjoys 45 mainline services a week – up from 35 in 2011, and the size of vessels has almost doubled from 3,700 TEU to 6,200 TEU. India has 14,500km's of navigable waterways, and Maersk has been privileged to be the first shipping line to partner with Government on piloting key routes, including from Varanasi to Kolkata, and from Kochi to Kattayam.”
Maersk looking forward to explore it's potential further
“We look forward to exploring this potential further, to the benefit of all stakeholders.” As outlined in the Draft National Logistics Policy, which we are delighted to have played a role in, there are still number of key challenges to be advanced for the benefit of Indian importers and exporters, including a reduction in logistics cost (from the current baseline of 14% of GDP), improved connectivity between hinterland and coastal markets, and further digitization. We at Maersk are committed to walking side by side with Government in realizing these lofty goals.
Considering the East Coast port's contribution in country's economic growth driver, Mr. Steve highlighted that, “Whereas India is growing overall, with 7-7.5% GDP growth forecasted for this year, it is also fair to say that the East Coast remains a key driver of this growth, considering the strategic location of East India which acts as a gateway for South-East Asian countries. Since China has overtaken the US as the largest trading partner of India, the East Indian Ports have become busier. Traditionally, ports in the West Coast had a significant share in container traffic, at least twice that of the ports in Eastern India.”
Kolkata : the oldest riverine port of India has a big role to play
Focussing on Eastern Ports, he said, “However, the trend has shown a reversal as India's merchandise trade with Asian nations is growing faster than the West. The Eastern Ports are closer to where the action in Asia is and are therefore growing. West Bengal also acts as a natural corridor to the North-Eastern States of India, Nepal and Bhutan. Needless to say, in all this, the oldest riverine port of India has a big role to play.”
Expressing his concern over high port tariffs and policy matters, Maersk India Chief said, “However, we as an industry are also facing some tough times with high costs. High port tariffs make Indian ports uncompetitive compared to global peers in their bid to attract more large-size direct calls, which was the primary reason for the abolition of restrictive cabotage rules. Indian terminals are also costlier compared with their foreign counterparts when it comes to cargo-related rates.”
He also expressed his concern on global warming and its impact on maritime sector. Mr Steve claims it as another challenge, climate, an important issue even globally. “The transport sector is responsible for 23% of global energy-related emission. Shipping alone is responsible for 2-3% of global emissions.”
“We at Maersk are committed to new sulphur regulation of IMO 2020 of reducing emission of sulphur particles from vessel to 0.5% in 2020 from baseline of 3.5%.  Maersk target for 2050 is aimed at carbon-neutral shipping.”
“Maersk is an active member of MACN (Maritime Anti-Corruption Network) driving elimination of corruption in the maritime industry, and I urge you all to participate in this effort.”
Briefing on a number of initiatives taken by Maersk Group, the Mr Steve said, “... over the past 2 years, in order to ensure our valued customers – are able to leverage this growth story, we have undertaken a number of initiatives.
Our Engagement with Brokers have increased, which has helped us understand more about the brokers' business and their customers' needs, to support their business growth.”
•             With our multiple products offerings in Logistics and Services along with our Ocean products, we are working to simplify and connecting brokers' customers' supply chain for further growth
•             Each broker has a dedicated customer service agent to look after their business All THE WAY
•             Keeping pace with the digital advancement, we recognize the importance of offering cutting edge digital solutions to our customers
•             We are proud to be the first in the industry to launch “fixed spot offers” as a digital channel for our customers exporting on most of the corridors across the globe.
•             We have also launched a range of locally inspired digital solutions, such as an enhanced importer interface, and an expansion of payment options including PayTM.
“Most notably, in line with our vision of becoming the global integrator of container logistics, we have integrated our shipping and supply chain businesses and most recently even the Inland services, and are now well positioned to offer you a full range of supply chain solutions.”
Maersk India Chief concluded his speech affirming that, “we are eager to partner with you to deliver best-in-class logistics solutions and are very enthused and excited about the prospects in India.”
The Association decided to extend the tenure of the committee for 2 years for better working environment.
Vivek Choudhary continue as Chairman, Shri Ajay Chhajer, Vice Chairman, Shri J.S Chopra, Shri Rajiv Agarwall, Shri Pawan Farmania, Shri Bharat Jain, and Mr Manoj Vyas will continue as Managing Committee Member for the term 2018-2020.

Cotton imports set to double amid shortage for 2018-19 seaso

NEW DELHI: India’s cotton imports are set to double amid crop shortfall for the 2018-19 season which ends in September.
While cotton industry estimates imports to cross 30 lakh bales (each of 170 kg) for the season, double from 15.8 lakh bales reported last year, trade sources believe that cotton import shipments will be restricted to around 25 lakh bales as against estimated imports of 31 lakh bales.
Delayed shipments
“Out of the total contracted imports of 27 lakh bales for the season, about 14 lakh bales have already arrived at Indian ports till July-end, while additional 10-11 lakh bales are estimated to arrive by September. There is some delay in several shipments, due to which about 2-3 lakh bales are likely to arrive in October,” said Atul Ganatra, President, CAI. CAI had estimated 31 lakh bales of cotton imports for the year.
On the other hand, cotton prices will rule higher even amid increased imports as the shortage of fibre is likely to cause supply crunch till the beginning of the next season after October 2019. Trade estimates prices to hover between Rs.44,000-46,000 a candy of ginned cotton (each of 356 kg).
The 2018-19 cotton crop is estimated at over a decade-low at 312 lakh bales. This prompted industry to look for cotton from global suppliers such as the US, Brazil and African Countries.
 

Rice exporters want Centre to obtain duty cuts at RCEP

NEW DELHI: India’s non-basmati rice exporters want the Government to bargain hard in the ongoing RCEP negotiations, seeking duty cuts from ASEAN nations, the second largest market for the cereal. Though India is the largest exporter of rice, it does not have any say in the South East Asian region, where four of the top five markets are located.
 “We would like the Government to press for duty cuts on rice exports in the RCEP talks,” said BV Krishna Rao, President of the Rice Exporters Association. In fact, India competes with major Asian rice producers such as Thailand, Vietnam and Myanmar in markets such as Africa, but it is finding it difficult to get a foothold in the South East Asian market.
Africa is the biggest market for rice, estimated at around 15 million tonnes annually, where India has a share of over 50 per cent. South East Asia is the second largest market, with an estimated size of around 8-10 mt annually. “Lack of market access, non-tariff barriers and higher duty imposed by Asean members on Indian rice has forced exporters to concentrate on the African market,” Rao said.
The ASEAN Countries impose a duty of 50 per cent on the Indian rice. However the duty imposed on rice produced by member countries is 35 per cent. “There is a duty difference of 15 per cent on the Indian rice. If negotiated well at the RCEP, it could open new markets for us,” Rao said.
Besides, the Indian exporters also face non-tariff barriers from countries such as Indonesia and Malaysia, from whom we import bulk of the edible oils. Indonesia, for example, specifies a short delivery period of five days for tenders, which works in favour of neighbouring producers such as Thailand and Vietnam, but not for Indian exporters.