Kakinada deepwater port set to handle rice exports

Exporters will now heave a sigh of relief from paying huge demurrage due to waiting time as the Kakinada deepwater port is all set to handle rice exports to decongest traffic at the neighbouring Kakinada anchorage port.

Kakinada located in East Godavari district of Andhra Pradesh, about 150 km from Visakhapatnam, the State's main industrial hub and proposed executive capital, is the leading rice exporting centre in India. Global shortage has suddenly increased the demand for rice from India during the pandemic.

The Kakinada anchorage port owned by the State Government is the most-preferred port for rice export as it is totally free from contamination unlike other ports which handle dusty cargoes like coking coal and iron ore.

On the basis of a report submitted by Secretary of Ministry of Commerce Pawan Agarwal, who visited Kakinada last month on a fact-finding mission, the State Government recently issued an order permitting the Kakinada deep water port to export rice after guaranteeing capacity utilisation by the Kakinada anchorage port. Aurobindo Realty acquired 41.25% equity in the deepwater port (Kakinada Sea Ports Ltd) following an agreement signed with GMR Infrastructure.

MS Kumar, Director, Cocanada Chamber of Commerce, told Bizz Buzz on Saturday that ships would be allowed to handle rice at the deepwater port only after anchorage port is assured of 10 ships at any given point of time. This will enable the workers to get engaged throughout the year.

Kakinada handled rice exports of 10.25 lakh tonne during 2019 (calendar year) as against 22.5 lakh tonne in 2020 despite the pandemic, said Kumar, who is also the CFO of Lotus Marine Services Pvt.Ltd.

At present, 21 ships are waiting for anchorage after the congestion forced diversion of nine ships to Kandla and five to Visakhapatnam Port. Exporters say long waiting time is forcing them to pay huge amounts towards demurrage making their business unviable. There is heavy demand for rice from India to China, Thailand and Vietnam. While Viternam has become an importer of rice due to drought, production in Thailand is severely hit due to the Covid-19 pandemic.

A waiting time of 30 days at Kakinada due to congestion is forcing the exporters to incur an additional expenditure of $3 lakh per month.

JK Nayak, General Manager of Orissa Stevedores Ltd, said the decision to allow another port to export rice would benefit the rice millers, exporters and cargo handling agents as well as the paddy-growers.