According to Mining News Pro -India has urged Bangladesh to use Kolkata and Haldia ports for transhipment purposes. The initiative can make coastal shipping more cost effective for bilateral trade, thereby shifting cargo from the costly land route. This is in line with augmneting handling capacities on either side amid growing trade volumes.
Rising sponge iron exports from India to Bangladesh - India`s sponge iron export to Bangladesh were about 80,560 MT in 2014, which in 2015 moved up by 47.03% and stood at 118,451 MT. Similarly growth continued in the year passing as the India`s sponge exports to Bangladesh stood at 238,404 MT in 2016 & 254,663 MT in 2017. Meanwhile in 2018 (Jan-Jul) exports to Bangladesh have recorded at 209,750 MT. Thus its expected that the figure might cross 350,000 MT by the end of year (Jan-Dec 2018).
Indian customs authorities have already cleared the deck for Bangladesh to use Haldia as a transhipment port. However, Bangladesh is yet to approve the same. The proposal was reiterated at a ministerial meeting in Dhaka earlier this week.
Keeping in tune with the trend, movement of bilateral cargo through coastal shipping is also rising. During the first six months of FY19, the port handled approximately 4,000 containers traded between the two nations. This is higher than 3,700 boxes handled in the full year of 2017-18. But there is a problem. As the overall trade is heavily in India’s favour, the volume of return cargo from Bangladesh is abysmally low. The low capacity utilisation keeps the coastal freight rate — between Pangaon river terminal near Dhaka and Kolkata — at a high USD 13.5/MT.
According to Sharad Varma, Managing Director of the Kolkata-based shipping agent, B Ghose & Co. availability of return cargo can bring down the freight rate by at least USD 4/MT, helping both the sides to access each other’s market at a lower cost.
Congestion at Chittagong - The road movement and the 10-12 days waiting period at Chittagong due to congestion, makes this logistics costly.
If Dhaka responds to India’s proposal, Bangladeshi exporters can send their products from Pangaon to Haldia to be loaded on to Colombo or Singapore-bound ships. The whole process will be completed in a maximum of three to four days.
While there is no available cost estimate, Indian officials expect shipping lines to tap the opportunity and offer competitive rates to make the proposition viable.