Recently released market study: India Shipping Report Q2 2014

The primary issue in Indian shipping continues to be the state of the nation's ports. Investment in the 12 major state-run facilities has not kept up with the demand engendered by the rapid economic growth experienced in India over the past decade. This is leading to repeated issues of congestion in the ports, but investment is now being made. However, this may be a case of too little, too late. Further, Indian ports' troubles have been compounded by a fall in demand in the eurozone, which has contributed to a fall in container throughput at many facilities in recent months. It is hoped that the projected return to growth in the currency bloc in 2014 will result in throughput growth returning to the major Indian ports.

Headline Industry Data

* 2013/14 (ending March 2014) Port of Kandla tonnage throughput forecast to decline by 1.0% followed by growth of 1.4% in 2014/15. Over the medium-term forecast period from 2014/15 to 2018/19, growth will average 2.1%.
* 2013/14 Port of Jawaharlal Nehru container throughput forecast to contract by 5.1%, followed by growth of 4.8% in 2014/15. Growth to average 6.0% growth per annum over the medium term.
* 2013/14 trade real growth forecast at 5.3%, and to average 8.1% to 2018/19.

Full Report Details at
- http://www.fastmr.com/prod/799968_india_shipping_report_q2_2014.aspx?afid=301

Key Industry Trends

State-Owned Ports Will Lose Out To Private Firms In Short Term: The lack of interest in the tender to convert the Chennai Port Coal and Iron Ore terminal into a container terminal are indicative of a wider malaise in India's state-owned ports sector. We believe the project development plans for state-owned behemoths, such as Jawaharlal Nehru Port and Chennai, are unlikely to succeed over the short term because of incipient regional overcapacity, and the attractions of newer, privately owned ports.

TCI To Benefit From Consumer Demand Story: We believe that Transport Corporation of India (TCI) will continue to witness growth in its express section on the back of the country's long-term economic growth prospects, rising incomes and growing middle classes, which are resulting in an increasingly well developed ecommerce sector, and booming demand for consumer electronics. Oil Trade Demand Drives New Mangalore To Dredge Oil Berths: Plans to deepen the draught of two oil berths at India's west coast port of New Mangalore signal the importance of India's oil trade. The country's net imports of crude oil have increased over the past five years, and BMI's Oil & Gas desk forecasts this growth to strengthen over the medium term.

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