We share the update of the current situation in the Indian market and key issues to be taken into account by the impact that is causing the regrowth of the Covid-19 and the passage of Cyclone Tauktae in international trade with this important market.
OVERVIEW AND MARKET BEHAVIOR:
Air Export:
• In Kolkata - Only vehicles with the approval of local authorities will be able to get off the road. This can cause minor delays.
• Cyclone Tauktae has caused heavy rains and storms on india's west coast. This has led to power outages in several areas.
• The cargo operation of the rest of India continues to operate, without any major concern.
Sea Export:
• As Cyclone Tauktae has intensified into a severe cyclonic storm that hits the shores of Gujarat and Maharashtra,
we have seen a significant impact on port operations and delays in ship schedules along India's west coast.
• All shipping lines have announced ocean freight rates with a rise in the rate of the first fortnight of May 2021.
• While transport challenges are seen in almost all locations due to the current shortage and restriction of blockade, the main impact is being seen in South Gujarat, Karnataka, West Bengal and West India (Pune Belt).
• Transhipment ports such as Colombo and Singapore still face significant container accumulation which in turn affects severe container shortages and allocation.
International restrictions by COVID-19 pandemic:
In terms of side effects, the scale of the crisis in India is likely to delay international restrictions more than expected. Preventing this spread from India
requires strict quarantines and travel restrictions. That's bad news for airlines, airports and businesses. That would also have a damaging effect on global growth.
Pharmaceutical problems:
The pharmaceutical industry in India is the third largest in the world in terms of volume and the thirteenth largest in terms of value. It contributes to 3.5% of total medicines exported globally and about 20% of generic drug exports.
If these exports are compromised, there will be all sorts of health care consequences around the world.
In today's situation, India produces about 70% of the world's vaccines.
The crisis in India has already meant that these vaccine exports have been postponed or cancelled, if India is unable to provide vaccine supplies to the rest of the world, we can expect side effects in the form of recurrent blockades, a greater need for social estating measures and a significant decline in economic activity.
Supply chains:
Approximately 80% of world trade in goods by volume is transported by ship, according to the United Nations World Trade and Development Conference, and India provides many of its crews.
More than 200,000 of an estimated 1.7 million sailors worldwide are from India, according to Guy Platten, Secretary General of the International Shipping Chamber.
The world could face both a serious threat to global cargo flows and a "humanitarian crisis," because crews would not be able to leave their boats and return home.
Port operation in India.
• Operations at Mundra Port, India's largest private port, have already resumed, according to a port official. However, the port of Kandla, the country's largest government port, has not resumed operations because wind speeds of more than 70 kilometers per hour made it unsafe to do so, port officials said.
• The port of Karaikal in southern India invoked force majeure until 24 May after operations were "severely affected" by the pandemic
• unloading ships and sending them to their next destination could create supply chain bottlenecks.
• India has 21.9 million tons of cargo scheduled to arrive this month, but with labor and force majeure shortages in some ports, many of the ships could experience discharge delays
• The cargo movement at Visakhapatnam Port, one of India's main maritime terminals, is also partially affected after the local merchant agency announced force majeure.
This blog post picks up information provided by the following sources:
https://www.bbc.com/mundo/noticias-56943832
https://cnnespanol.cnn.com/2021/05/11/catastrofe-covid-india-escasez-mundial-economia-trax/
https://gcaptain.com/indias-covid-crisis-hits-ports-as-risk-to-trade-grows/
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