National News

Rise in Forex reserves by $1.99 bn to $419.99 bns

Mumbai: According to the Reserve Bank, increase in the core currency assets resulted in an increase in India’s forex reserves by USD 1.994 billion to USD 419.992 billion for the week ended May 24. In the previous reporting week the overall reserves had declined by USD 2.05 billion to USD 417.99 billion. In April 2018 the reserves had touched an all-time high of USD 426 billion.The Apex Bank said that foreign currency assets, a major component of the overall reserves, increased USD 1.991 billion to USD 392.188 billion in the reporting week. Data showed that gold reserves remained unchanged at USD 23.021 billion.The special drawing rights with the International Monetary Fund increased USD 0.8 million to USD 1.445 billion. The Country’s reserve position with the fund also increased USD 2 million to USD 3.336 billion.

13 per cent rise in India’s coal import to 21 MT in April

NEW DELHI:As per a report, an increase by 13.4 per cent was seen in India’s coal import in April to 20.72 million tonnes compared to 18.27 million tonnes (MT) in the same month last year.According to provisional data by mjunction services, of the total coal imports during April 2019, non-coking coal or thermal coal shipments were at 15.08 MT.In April, imports of coking coal, used in iron and steel making, were 3.52 MT, while imports of metallurgical coke were at 0.22 MT.Mjunction, a joint venture between Tata Steel and SAIL, is a B2B e-commerce company that also publishes research Latest mjunction data showed that coal and coke imports during 2018-19 increased by 9.66 per cent to 235.35 MT as compared to 214.61 MT imported in FY2017-18,Mjunction MD and CEO Vinaya Varma commented on the import trend, saying, “The flat trend in non-coking coal import in April was in line with expectations, as the power plants continued to have sufficient stock of coal.”He added, “This scenario may continue in the current month.”Earlier, the Centre had urged State-run Coal India to pledge self-sufficiency in thermal coal production so as to eliminate its import.The Government has set a target of 1 billion tonne of coal production by 2019-20 for the mining major. It is considering relaxing the timeline.

Singapore takes top slot, and India moves up to 43rd place in World Competitiveness Ranking

NEW DELHI:A global study showed that India, due to its robust economic growth, a large labour force, and its huge market size, has moved up one place to rank as the world’s 43rd most competitive economy.Singapore has toppled the US to attain the top position.In the 2019 edition of the IMD World Competitiveness Rankings, Singapore has moved up to first place from third place last year, while the US has slipped to the third position. Hong Kong SAR continues to hold second place, helped by a benign tax and business policy environment, and access to business finance.According to Economists, competitiveness as vital for the long-term health of a country’s economy, as it empowers businesses to achieve sustainable growth, generates jobs and, ultimately, enhances the welfare of citizens.

VPT Customs introduces paperless processing under SWIFT

VISAKHAPATNAM:In order to upload supporting documents at Visakhapatnam Port for exports the Central Board of Indirect Taxes and Customs has introduced paperless processing under Single Window Interface for Facilitating Trade (SWIFT).Officials said that the move, introduced as part of the eSANCHIT scheme, has also been extended to other areas, after introducing it as a pilot project in New Delhi and Chennai,The shipping bill, invoice, purchase order, licence, certificate of analysis, and other supporting documents can now be filed online by the exporters and Customs broker, and the Customs officer will access the uploaded e-versions for processing.After filing the documents, the authorised person can approach the designated place for clearance. It is now mandatory to upload digitally signed documents on eSANCHIT at the time of filing of shipping bill.Exporters and Customs Brokers would not be allowed to submit supporting documents by hand, said Principal Commissioner of Customs, D.K. Srinivas.

Commerce Ministry preparing to boost exports through e-commerce

NEW DELHI: DPIIT, or the Department for Promotion of Industry and Internal Trade, will come out with a strategy to promote exports through ecommerce, detailing the role of the Reserve Bank of India, India Post, customs authorities and export promotion councils.A few initiatives the Government is considering to boost exports through ecommerce are a Parcel Directorate for ecommerce packages, standardisation of PIN codes, and integration of India Post tracking with foreign postal systems. An official privy to the details said, “We plan to prepare a document in a month’s time with deliverables for all stakeholders involved in import and export.”The department had a meeting with stakeholders including representatives from Amazon, eBay and PayPal, other Government Departments and Export Promotion Councils.DPIIT has decided to set up four working groups comprising industry and Government officials to promote exports through ecommerce. The working groups are focussed on RBI, customs, Goods and Services Tax, and India Post, and will detail the norms that can be eased for ecommerce exports.The official added, “We want a seamless factory-to ship system wherein the product meant for export is tested, quality parameters are checked and gets customs clearances with adequate handholding.”LocalCircles estimates reveal that India exported products worth $1.2 billion via the ecommerce channel in 2018-19. These include categories like home décor/furnishings, medicinal products, books, fashion apparel, beauty products and office products. About 75,000 sellers or exporters are currently enabled to sell on ecommerce.To achieve a 10-fold growth, it has proposed that RBI give exporters the flexibility to sell goods at a premium based on product demand or at a lower price in case of stock liquidation, permit higher inward remittance of invoice value at the time of export, and allow realisation of export proceeds up to a period of 24 months from the date of export.Sachin Taparia, Chairman, LocalCircles, said, “Such growth of ecommerce exports will benefit the Indian economy by creating jobs at local levels, bring additional foreign exchange and provide a significant boost to Make in India.”

FY 19: Coconut product exports to cross INR 2,000 cr

As per a report, India’s coconut product exports are set to cross the Rs 2,000-crore mark in FY2019, thanks to higher prices for activated carbon in the overseas markets like the US, the UK, Germany, Japan and Korea, where it is mainly used for the purification of gold, water and air. India exported 80,467 tonnes of activated carbon, valued at Rs 1,123.64 crore, till January. The total exports of overall products stood at Rs 1,812.55 crore. The value for the entire fiscal is estimated to touch Rs 2,100 crore.In FY18, activated carbon fetched a price of Rs 140/kg in FY2019 vis-à-vis Rs 100/kg.According to the report, the low price of coconut shell and higher price realisation of activated carbon has made the industry more attractive.

Opportunities for India’s agricultural exports through US-China trade war

According to analysts, the US-China trade war offers good opportunities for India to boost exports of certain commodities, a key one being agricultural produce.Analysts emphasised that the need for the new government to adopt a consistent policy to make agricultural exports more competitive; this will boost shipments to China.Government support is required to enable goods to be competitive in international markets. To achieve this goal, it is important to facilitate lower production costs. The prevalent high interest rates, a primary concern in this regard, need to be lowered, so that our exporters can take advantage of the emerging global trade scenario, analysts emphasised.As per reports, analysts stressed that this will also help reduce the high trade deficit with China.

SEA seeks DGFT permission for bulk export of rapeseed oil, mustard oil

A report states that the Solvent Extractors’ Association of India (SEA) has submitted a representation to the Directorate-General of Foreign Trade, seeking permission to export rapeseed oil and mustard oil in bulk without any restrictions of pack size and MEP in line with other edible oils. Currently, all vegetable oils are allowed to be freely exported, irrespective of pack size, with the exception of rapeseed and mustard oils, which are allowed a maximum pack size of 5 kg for export.Rapeseed production this year has been to the tune of 85 lakh tonnes, which has put tremendous pressure on the mustard seed, with farmers realising Rs 3,500 to Rs 3,600 per quintal against the MSP of Rs 4,200 per quintal. The report says that export of mustard oil in bulk may not be in large quantity but it will definitely impact the market sentiment.

Nitin Gadkari retains Road & Transport Ministry; also accepts responsibility of MSME Ministry

NEW DELHI: In the new Government Nitin Gadkari has retained Road Transport Ministry, and has been given additional responsibility of MSME Ministry. Gadkari, credited with jumpstarting the Country’s infrastructure, will need to create a revival plan for the small industries sector.An important issue requiring his concentration and efforts is vehicles running on alternative fuel and electricity, which will cut down on India’s huge crude imports.Gadkari has already outlined his plan for highways, which includes building a network of “world-class expressways”.While Gadkari is confident on his highway plan, he has his task cut out for MSMEs.

Piyush Goyal to continue Railway reforms, takes charge of Commerce and Industry Ministry

NEW DELHI: Piyush Goyal, who took charge of the Railway Ministry, said that the Railway Ministry will continue to work on reforms introduced by the previous Government in order to improve the efficiency of the Railways.Mr. Goyal also took charge of the Commerce and Industry Ministry.Mr. Goyal came to the Ministry accompanied by outgoing Commerce Minister Suresh Prabhu.He said, “I would like to thank the Prime Minister for the trust he has reposed in me by giving me this opportunity to look after the Commerce and Industry Ministry.”Mr Goyal, in his position as Commerce Minister, will have to, among other tasks, work on pushing India’s exports at a time when two large economies—the US and China—are engaged in a trade war.India’s merchandise exports grew 9% to $331 billion in 2018-19 amid liquidity squeeze but foreign direct investment inflows declined for the first time in six years in 2018-19, falling 1% to $44.37 billion.The industrial policy, e-commerce policy, and a host of other policies, are also waiting to be finalised.

KCCI: Trade will be discouraged by NMPT move to introduce anchorage charge

MANGALORE: Kanara Chamber of Commerce and Industry (KCCI), Mangaluru, has said that the trade will be discouraged from doing business with the port due to the New Mangalore Port Trust’s (NMPT) proposal to TAMP (Tariff Authority for Major Ports) on introducing anchorage charge and increasing container related charges at the port. KCCI, which has submitted its recommendations to TAMP on the revised proposal of NMPT for the revision of scale of rates (SoR) at the port, said the introduction of anchorage charges would be disadvantageous to the port.According to NMPT’s proposal to TAMP, there should be no anchorage charge up to 48 hours. However, anchorage charge of 10 per cent of the applicable berth hire charges should be levied for the period above 48 hours to 96 hours. The charge will be 30 per cent of the applicable berth hire charges for the period above 96 hours to 144 hours, and 50 per cent of the applicable berth hire charges for above 144 hours.
Containers The KCCI President spoke on NMPT proposal to increase container related charges, saying that despite several attempts by NMPT to develop a container terminal at the port, no interest was generated in the key players even after offering additional inducements, primarily due to low container traffic.Prashant CG, Honorary Secretary, KCCI, said that the hike in container-related charges, as mentioned in the proposal, will be around 54 per cent. The proposal to increase container handling charges will certainly discourage the trade from using NMPT for their export-import requirement.

Export ban by Saudi Arabia on Kerala fruits and vegetables lifted

COCHIN: The export ban by Saudi Arabia after the Nipah virus attack last year has been lifted; this has caused relief among Kerala’s fruits and vegetable exporters.A communication received in this regard from the Saudi Arabian authorities during the second week of May has led to the commencement of direct exports from the three airports in the State, said P.E. Ashraf Ali of Pomona Exports, Kozhikode.One of the major export markets of fruits and vegetables from Kerala is Saudi Arabia; the presence of a large floating population ensures a good volume of business from there.Ashraf Ali said that, with the lifting of the embargo, Kozhikode airport alone was handling 20 tonnes of fruits and vegetables per day valued at $50,000 to various destinations in Saudi. An equivalent amount has also been moving from the other two airports of Kochi and Thiruvananthapuram to Dammam, Riyadh and Jeddah airports. Currently, the major items in the export basket are mangoes such as Alphonso, and Banganapalle, followed by bananas and pineapples. About 150 tonnes of fruits and vegetables are shipped daily from Kerala to various gulf countries; of this, 30-40 tonnes would be the consignment to Saudi alone. Exporters are now looking at increasing the quantity of exports to 200 tonnes this year, now that the estrictions are eased.Ali said, “We are receiving more export enquiries from European countries, Japan, New Zealand, Korea etc especially for the shipments of fruits.”

Commerce Ministry proposes separate Department of Trade Facilitation & Logistics

NEW DELHI: The creation of a separate department for trade facilitation and logistics has been proposed by the Commerce and Industry Ministry for better coordination among different Government agencies.The Ministry, in its 100-day agenda for the new Government, said, “Economic Advisory Council to the Prime Minister (PMEAC) has also recommended the same. This will lead to better coordination.” Currently the logistics division in the Department of Commerce is mandated to develop an action plan for the logistics sector in the Country through policy changes, improvement in existing procedures, identification of bottlenecks and gaps, and introduction of technology.However, no single or distinct department exists that can oversee all the aspects related to logistics covering various modes of shipment such as sea, roads and railways.The logistics and transportation costs in India are pegged at 14.4% of the gross domestic product, much higher than China’s 8%.In January, the PMEAC had suggested setting up of a separate Logistics Department to boost the transport sector and to improve Ease of Doing Business.The 10-point action plan has also proposed rolling out policies on National and Multi-Modal Logistics, integrated National Logistics Action plan, and logistics planning and performance management tool. As per the plan, a Multi-Modal Transportation of Goods (MMTG) Bill will be introduced in Parliament to replace the existing MMTG Act, 1993.The new bill would introduce concepts such as regulation of self-regulatory agencies and facilitation of smooth movement of products for both domestic consumption and foreign trade.

FICCI President says India should cut interest rates to help exporters

NEW DELHI: Industry body FICCI President Sandip Somany recently said that India should cut interest rates further and adopt consistent policies for the export of agricultural produce to enable Indian exporters to take advantage of the current US-China trade war.Somany added that the trade war, under which the USA and China have imposed billions of dollars of tariffs on each other’s exports, offers a big opportunity for some categories of Indian exports to make a dent in both the US and Chinese markets,.According to Somany, the continuation of the US-China trade war would offer good opportunities for Indian exports in certain areas.Somany said, “If you are competitive, we can replace China in those areas. But the Government has to be supportive because production costs are high which makes our goods not competitive.“Our interest rates are at life-time highs, which makes our goods not competitive. That is an issue. Our inflation rate is low, running around 3 per cent. What is the need for banks to lend at 10, 11 per cent? It is uncalled for.” He added, “The interest rates need to come down by another 100 or 150 basis points.”The FICCCI President also said the NDA Government in its second term should make agricultural exports more competitive by adopting a consistent policy.He said that China had a huge potential for agricultural produce as it was a net importer. Now, with the ongoing trade war, India could step up its exports of soybean to China, replacing US shipments to an extent.

Record achieved by Paradip Port in vessel movement

PARADIP: Yet another feat was accomplished by Paradip Port, which successfully completed the movements of 30 vessels within 24 hrs, from 7.30 AM on 27th May, 2019 to 7.30 AM on 28th May. The movements were: 10 incoming vessels, 9 outgoing vessels, the shifting of 3 vessels, and 8 shipping support vessels. Shipping movements of these kinds greatly enhance the cargo throughput of the Port.39 vessels are currently waiting at the anchorage to enter the harbour.The harbour master, marine pilots, & staff of PPT, an able guidance by Capt. Atulya Kumar Mohapatra, Dy. Conservator, PPT, shipping agents, exporters & importers, and the co-operation extended by the Traffic Dept, all made possible this record achievement.The previous record, on 15th October 2018, was the handling of 27 vessels by PPT in 24 Hrs.Paradip Port, vying for the coveted top position in the Country, is now preparing to enhance the Cargo throughput with a variety of other infrastructure and modernization facilities at the Port. Paradip Port clocked 109.27 MMT Cargo handling mark in the last fiscal, and secured 2nd position among the Major Ports of India. It is aiming for 120 MMT Cargo handling mark this fiscal year.

Comprehensive draft of Export Policy by Commerce Ministry

NEW DELHI: A comprehensive draft of the export policy has been created by the Commerce Ministry, which includes product-specific rules with a view to provide a ready reckoner for exporters.The Directorate General of Foreign Trade (DGFT) said, “Based on inputs received from various partner Government agencies, it is proposed to bring out a comprehensive exports policy for all ITC (HS) tariff codes (including items which are ‘free’ for export and do not currently exist in the policy), covering conditions/restrictions imposed by partner Government agencies on exports.” The aim of the draft is to consolidate the export norms for each product as applicable at different Government agencies.Indian Trade Clarification based on Harmonised System of Coding (ITC-HS Codes) has been adopted by India for import-export operations.Eight-digit HS codes have been accorded to every product. The compendium will help an exporter know all the applicable norms pertaining to a particular product, helping him/her understand policy conditions for that item. The aim is to consolidate the norms and not make any changes in the existing export policy of the country.The DGFT said that the updated draft includes all existing policy conditions, all notifications and public notices issued after January 2018. It also includes non-tariff regulations imposed by different Government agencies.Exporters’ body Federation of Indian Export Organizations (FIEO) said, commenting on the move, that it would provide a “ready reckoner” for traders and help in digitization.FIEO Director General Ajay Sahai said, “It will help exporters in understanding export norms and conditions for items.”The DGFT sought the views of all stake holders on the draft of the export policy. A similar policy also exists for imports. While Schedule 1 deals with imports, Schedule 2 deals with export related matters.

IPA stresses advantages to Shipping Industry through online Port Community System

NEW DELHI: A “Game-Changer” for shipping operations, India’s new port community system, called PCS1x, is set to help reduce the high logistics costs in the Country.Mr. Manish Mrigank, Assistant Director at the Ministry of Shipping’s Indian Ports Association (IPA), is confident that PCS1x will improve India’s Ease of Doing Business and cut container dwell times.Mr. Mrigank said, “PCS1x will be transformational for the port ecosystem.”“The main objective is to create a single platform of information exchange for all stakeholders in the maritime ecosystem, to bring transparency and operational efficiency,” he added.PCS1x, a “single-window” cloud-based platform, facilitates secure message exchanges between Indian ports and local stakeholders, including shipping lines, terminal operators, freight forwarders, inland transport, customs authorities and banks.PCS1x operates currently at 19 ports, including Mumbai’s Jawaharlal Nehru Port Trust (JNPT), India’s biggest container gateway, with volumes of over 5mn TEU. The system would be rolled out to all the country’s 200 ports in the near future, said Mr. Mrigank.Mr. Mrigank stressed that PCS1x had several advantages such as reduction in paper-based transactions and introduction of process optimisation and standardisation for ports, terminals, and other stakeholders, such as the digitisation of key processes surrounding gate operations.The Asssistant Director noted that PCS1x had already allowed one port to slash the time taken to handle vessel submissions.He said, “Currently one port takes an average of 30 hours to approve the vessel profile submission after it’s requested. PCS1x helped identify the bottleneck and bring down the response time to 30 minutes,” adding that streamlining payments for port services was another key improvement.The PCS1x payment gateway simplifies the invoice transaction process, since currently most ports use personal deposit accounts at various banks, which customers must pay into.Mr. Mrigank said, “The new payment aggregator solution provides the transaction within hours between any two banks. This is a giant leap towards Ease of Doing Business and will help in the improved invoice reconciliation process, easy dispute resolution and ease of cash flow and fund management.”According to some sources, there were teething problems with the launch of the system, with some stakeholders blaming a lack of preparation for software glitches.Mr Mrigank said, “Considering the wide scope of the project and tight deadline – it was completed within seven months – there was initial apprehension during the stabilisation period, but all the concerns have been addressed and this has been a successful journey so far.”PCS1x, the port community system, is one of several initiatives to reorganise India’s fragmented logistics industry. The Government announced a National Logistics Portal last year to help bring down logistics costs from 14% of GDP to 10% by 2022, including an eMarketplace of logistics services, which included freight booking and tracking across all transport modes, price discovery and payments.The Asssistant Director affirmed that PCS1x would connect to the portal, allowing for container track-and-trace, which would be a “game-changing experience for the whole ecosystem”.He added, “I feel PCS1x is just a step towards a better, efficient and transformation journey for port industry modernisation. With the advent of new technologies such as blockchain, AI and machine learning, maritime stakeholders can definitely leverage these to become even more efficient and robust.”

US-China trade war adversely affects India’s Castor oil export

A report states that the Trump government’s economic measures against Chinese goods in the milieu of the US-China trade war have resulted in sluggish demand from the industrial units of the neighbouring country and impacted India’s castor oil exports adversely; exports of castor oil have gone down by 8.8 per cent in April 2019.Recent figures from the Solvent Extractors’ Association of India (SEA) show that the export of castor oil was 45,987 million tonnes in April 2019, against 50,312 million tonnes in the corresponding period last year.The report added that according to Industry insiders, if trade-related tension continues between the US and China, castor oil exports would go down further.

Pharma companies route exports via JNPT, not MPT

PANAJI: The pharmaceutical industry of Goa has an estimated turnover of more than Rs 8,000 crore. However, as manufacturers route their exports through Mumbai, the Mormugao Port Trust (MPT), which currently relies on coal handling operations, continues to be out of the pharmaceutical industry’s loop.Goa has about 70 pharma units and 70 ancillary units; today the State accounts for 10% of India’s pharmaceutical output, which is not surprising. For logistical reasons, pharma goods continue to be taken by road to Jawaharlal Nehru Port Trust (JNPT), Navi Mumbai, for shipment, and not to MPT.Reasons are given for this by the pharma industry. With a feeder vessel operating just once a week between Goa (MPT) and Colombo, multi-national drug manufacturers say they prefer to send the finished product to JNPT, where the consignment is immediately loaded onto a container vessel.Pravin Khullar, President, Goa Pharma Manufacturers Association, said, “Cargo is accumulated at MPT till a ship can sail. A week’s delay at the port is the real hurdle.”

CITI urges Govt to be cautious with RCEP as it may impact textile exports

NEW DELHI: The Government has been cautioned by the Confederation of Indian Textile Industry (CITI) to be careful while negotiating for the proposed Regional Comprehensive Economic Partnership (RCEP) trade agreement, and to not cede space to China in the global textiles and clothing (T&C) sector.CITI Chairman Sanjay Jain said, “India’s trade deficit with China in the textiles and clothing sector is likely to be widened once RCEP is concluded and could be detrimental for its domestic textile manufacturers.” The textile industry body said that while the ongoing US-China trade war presents an opportunity to Indian textile manufacturers to enhance their exports to the US, China too would be looking for new markets for its products.“The RCEP trade scenario reveals that India must tread cautiously, particularly with China, as half of India’s T&C trade in RCEP is with China, with which it had a big trade deficit of almost $1 billion in 2018.” China is already re-routing its textiles into India through Bangladesh and Sri Lanka, hence this is critical .

NITI Aayog says new Govt likely to announce an array of economic reforms in first 100 days

NEW DELHI: According to a top official at the Government’s main think tank, a slew of ‘big-bang’ economic reforms that should please foreign investors are likely to be pursued in the first 100 days of Prime Minister Narendra Modi’s second term.Rajiv Kumar, Vice Chairman, NITI Aayog (National Institute for Transforming India), who reports directly to Modi, said that the reforms will include changes in labour laws, privatisation moves, and creation of land banks for new industrial development. Recently, Kumar said, “They (foreign investors) will have reasons to be happy. You will see a slew of reforms I can assure you of that. We are going to pretty much hit the ground running.” PM Modi is Chairman of the think tank.

Increase in gross GST revenue.

In May 2019 a total of Rs 1,00,289 crore gross GST revenue was collected.Of this,, CGST was Rs 17,811 crore, SGST was Rs 24,462 crore, IGST was Rs 49,891 crore (including Rs 24,875 crore collected on imports) and Cess was Rs 8,125 crore (including Rs 953 crore collected on imports). The total number of GSTR 3B returns filed for April, up to May 31, 2019, was Rs 72.45 lakh.The Government has settled Rs 18,098 crore to CGST and Rs 14,438 crore to SGST from IGST as regular settlement.The total revenue earned by the Central and the state governments, after regular settlement in May 2019, is Rs 35,909 crore for CGST and Rs 38,900 crore for SGST.The revenue in May 2018 being Rs 94,016 crore, May 2019 has seen a growth of 6.67 per cent over the revenue in the same month last year. Revenue in May this year is also 2.21 per cent higher than the monthly average of GST revenue in 2018-19 (Rs 98,114 crore).As per a release, a sum of Rs 18,934 crore has been released to the states as GST compensation for the months of February-March, 2019.

Centre looking at ways to support sectors hurt by US withdrawal of duty-free exports

NEW DELHI: Support is likely to be extended by the Commerce Ministry to the sectors affected most by the US decision to withdraw a special status scheme for India that allowed duty-free exports of more than 3,000 items from the Country.A Government official said, “The loss suffered by India due to the withdrawal of the Generalised System of Preferences (GSP) scheme will not be huge, but there are specific sectors which will take a hit. These sectors need some hand-holding.”The official added, “After assuming charge, Commerce and Industry Minister Piyush Goyal has been holding marathon meetings with officials on crucial issues over the weekend. He is also expected to discuss ways in which the export sector could be assisted following the withdrawal of the GSP scheme.”While GSP withdrawal affects $6.35 billion worth of exports from India, exporters stand to lose net benefits worth $260 million annually.The Commerce Ministry, indicating that it is not possible for the Country to ignore the interest of its people while working on trade deals, said, “We have significant development imperatives and concerns and our people also aspire for better standards of living. This will remain the guiding factor in the Government’s approach.”

FIEO says GSP withdrawal would have limited impact on overall exports to US, but some products may be impacted.

NEW DELHI: Mr Ganesh Kumar Gupta, President, FIEO, in reaction to the news of US withdrawal of GSP benefits to India from 5th June, 2019, said that India’s exports to the USA during 2018 were USD 51.4 billion. But out of USD 6.35 billion value of exports from India to the USA under the GSP scheme, a net benefit of only USD 260 million was obtained by Indian exporters, and thus at a macro level, the impact of GSP withdrawal on our exports to the USA would be minimal. However, exporters may find it difficult to absorb the GSP loss in the case of products having GSP benefits of 3% or more,.According to Mr. Gupta, the most affected sectors would be: 1) imitation jewellery (average GSP benefit 6.9%), 2) leather articles other than footwear (average GSP benefit 6.1%), 3) pharmaceuticals & surgical (average GSP benefit 5.9%), 4) chemical & plastics (average GSP benefit 4.8%), and 5) agriculture: basic & processed (average GSP benefit 4.8%).GSP withdrawal would also affect US manufacturers, who benefited from it on imports of parts and components, as well as US consumers, Mr Gupta said.He added that it would also indirectly benefit China. The first two months of 2019 have witnessed a significant rise in GSP imports from India for products on the Section 301 lists, but a fall for products where China does not face new tariffs. 97 per cent of increased 2019 GSP imports for India are on the China Section 301 lists. GSP imports on Section 301 lists increased by 18 %, while all other imports increased by just 2%. The FIEO chief remarked that this makes a very strong case for extension of GSP benefits for India.The Government should provide some support to products where GSP loss has been significant so that the market is not lost, Mr. Gupta said. He favoured extension of Rebate of State & Central Tax Levies Scheme (RoSCTL) on such products on exports to US.

Engineering sector in a fix after GSP withdrawal

KOLKATA: An expert has said that with the US withdrawing GSP benefits, the engineering sector in India seems to be in a tight spot, as its exports to the USA under the Programme account for about 44 per cent of the total annual duty benefits of USD 5.6 billion.Engineering exports to the USA stood at USD 331 billion in the 2018-19 fiscal.Rakesh Shah, Former Chairman, Engineering Export Promotion Council of India (EEPC India), recently said that India had been receiving a total annual benefit of USD 5.6 billion from the USA; of this, USD 2.5 billion constituted the GSP benefit for engineering exports. The former EEPC chairman stressed that high-end engineering exporters will have to take a hit of 2-3 per cent margin, whereas the low-value products, which constitute 40 per cent of the sector’s total value, may find it difficult to survive if the matter is not resolved in the next two-four months. Mr. Shah added that the exporters’ fraternity hopes that the newly sworn-in Union Commerce Minister, Piyush Goyal, will find an amicable solution to the trade hurdle, now that Indian exporters are striving to get a share of Chinese exports in an atmosphere of the USA-China trade war.The former EEPC Chairman said, “It won’t be a major problem if the matter gets sorted out in the next 2-4 months as the exporting units will get to fulfil the existing orders.”EEPC India Chairman Ravi Sehgal said, in a statement, that EEPC supported the government’s response to the issue. Sehgal said, “EEPC India fully supports the Indian Government’s response to the US withdrawal of the GSP benefits and are hopeful that the two nations would stay gainfully engaged to resolve all tThe new Government will be under pressure for a stimulus to offset the impact of the US move, said Mr. Shah.

CHINA NEWS

Stable growth seen in Jan-April in China’s cargo throughput

BEIJING: Official data showed 6.6 % growth in China’s cargo throughput at ports to around 4.3 bn tonnes in the first four months of this year compared with a year ago.At the beginning of this year, the Ministry of Transport (MOT) expanded the statistical range from major ports to all ports across the country.Cargo throughput at ports stood at 1.14 bn tonnes in April alone, the MOT said on its website.According to the report foreign trade cargo throughput amounted to 1.38 bn tonnes in the Jan-April period, up 2.6 % year-on-year, while the reading came in at 345.25 mn tonnes in April.Meanwhile, the first four months the report said, showed container throughput at ports enjoyed a 5.7-% year-on-year rise to 82.27 mn 20-foot equivalent units (TEU).Such growth came amid China’s steadily growing waterway freight volume, which saw an 8.6-% rise compared with the same period a year ago.

This year trade between India & China set to cross USD 100 bn: senior Indian diplomat

BEIJING: E-visa rules for Chinese businessmen have been further liberalised India, a senior Indian diplomat here said recently as the bilateral trade is set to cross USD 100 bn this year.According to the official data released by China early this year the India-China bilateral trade last year touched a historic high of USD 95.54 bn.In 2018 compared to 2017, according to the data, the trade deficit climbed to USD 57.86 bn from USD 51.72 bn.”We are glad that our bilateral trade will cross the significant mark of USD 100 bn this year,” India’s Deputy Ambassador in China Dr Acquino Vimal said while addressing an event on ‘India-China business forum, exploring opportunities, enhancing cooperation’ especially in the IT sector. “Closer development partnership between India and China has been growing steadily for the last several years. Since the last 20 years, the scale and profile of bilateral trade and investment between India and China has increased several folds.”This has been further strengthened in April 2018, when Wuhan witnessed the first Informal Summit between our Prime Minister (Narendra) Modi and President Xi Jinping. This Summit has provided a fresh impetus to our growing bilateral engagement,” Vimal said.As a result, he said the number of visits by trade and investment delegations have increased and the comfort and trust levels have improved.

Commodity flows from partners are changing due to trade curbs on China

BEIJING: Amid restrictions affecting farm to energy products China’s latest trade figures provide a fresh look at how commodity flows to the world’s largest importer are changing.Shifts in shipment trends were already underway, given the rising tensions between the Asian nation and some other countries, while the April data, released recently, preceded the recent escalation of the U.S.-China trade war.U.S. soybeans and gas, Australian coal, and Iranian and Venezuelan crude are the commodities affected by the changes.Compared with 1.51 mn a month earlier soybean imports from the U.S. rose 16% month on month to 1.75 mn tonnes in April.LNG purchases from America increased to 65,628 tonnes. China didn’t import any in March.U.S. crude oil shipments climbed to 477,833 tonnes.Iranian crude imports gained 41% to 3.24 mn tonnes, compared with 2.3 mn in March.In March the volume of Venezuelan crude expanded 79% to 1.9 mn tonnes, after reaching 1.06 mn.The soybean volume from Canada fell 65% to 71,812 tonnes from 205,776 tonnes in March.Coking coal imports from Australia increased 22% to 2.72 mn tonnes from 2.23 mn tonnes in March.

Factories in China worse hit than Expected from U.S. Trade Battle

BEIJING: As new orders for goods fell in response to uncertainties created by the escalating trade dispute with the U.S., activity in Chinese factories slumped in May, according to a key measure. The National Bureau of Statistics said on Friday that official manufacturing purchasing managers index fell to 49.4 in May from 50.1 in April Given that tensions have gotten worse between Washington and Beijing in recent weeks the fall was expected. But the fall was steeper than many economists forecast. The bleaker reading is likely to exert more pressure on Beijing to boost pro-growth measures to stabilize the economy and invigorate domestic demand, some economists said.Pitting short-term growth against the need for policy changes that it wants to enact to put the economy on sounder long-term footing the need for stimulus puts Beijing in a bind. In the years to come new growth measures are expected to add to a pile of local government and corporate debt that economists say threatens to weigh down growth. “You have to make a strategic choice between stabilizing growth and preventing risks,” Mr. Li Yang, a senior researcher at a government-backed think tank, told a forum Thursday. “There’s an obvious trend now toward stabilizing growth.”In an effort to ease a slowdown that started last year, which has been aggravated by the trade fight that has seen Washington and Beijing apply punitive tariffs on hundreds of bns of dollars of goods Chinese leaders have eased credit, reduced taxes and ramped up infrastructure spending. In March though Beijing’s stimulus measures appeared to be effective, the latest reading of factory activity adds to a picture of a resumed slowdown. Lower-than-expected growth was registered in industrial production, fixed-asset investment as well as exports in April. Those weaker results came before trade talks between the U.S. and China, which seemed to be progressing toward an agreement, were suddenly derailed. Washington subsequently raised tariffs and Beijing retaliated with its own measures.An indicator of external demand for Chinese goods, subindexes of the purchasing managers index measuring new export orders——plunged to 46.5 in May from 49.2 in April, the official data showed. A subindex for new orders fell to 49.8 from 51.4. All are below the 50 mark, signalling a contraction in activity.“China’s trade and economic situations may further deteriorate if the U.S. and China make no progress in trade talks,” said Mr. Ding Shuang, an economist at Standard Chartered. China will have to roll out more stimulus measures to boost demand, like another reduction in the reserves that banks are required to maintain he said.Bns of dollars have been unleashed by Beijing in liquidity this year to encourage bank lending, while letting local governments raise more funds from markets to spend on infrastructure projects. More tax cuts to individuals and companies to boost consumption and investment have also been offered. Businesses and economists, however, say domestic demand—from households to companies—remains lackluster due to concerns about rising costs and the nagging trade conflict.A World Bank report released Friday said domestic demand is key if the Chinese economy is to sustain rapid growth. It estimates that the latest increase in U.S. tariffs on USD200 bn of Chinese goods, which went into effect on May 10, would decrease China’s gross domestic product by about 0.2%. If the U.S. goes ahead with threats to impose tariffs on the remainder of its imports from China—more than USD300 bn in goods—the World Bank report said that could reduce China’s GDP by an additional 0.5%.

China’s inland river port throughput surging

BEIJING: Throughput at China’s inland river ports registered robust growth in the first quarter, a report released by Shanghai International Shipping Institute showed.Freight handled at the country’s major ports grew 6.6 % year-on-year in the first quarter to nearly 3.15 bn tonnes.Among them, inland river port throughput rose 15.4 %, contributing mainly to the steady growth of port production in the first quarter in China, according to the report.Given that China has improved the deep-water channel of the lower stream of the Yangtze River, the longest inland waterway in the country, to over 12.5 meters deep, there was a big rise in the number of vessels with 100,000 to 200,000 tonnes deadweight making the lower reaches of the Yangtze their ports of call.The ports such as Zhenjiang, Nantong, and Wuxi all saw surging freight handled with growth rate of more than 10 %, the report said.

Defence minister calls for stable China-US relationship with coordination, cooperation.

SINGAPORE: On June 2, State Councillor and Defence Minister Wei Fenghe said that China and the United States should follow the consensus by the two heads of state and promote a China-US relationship featuring coordination, cooperation and stability.Despite all the ups and downs, this year marks the 40th anniversary of the establishment of diplomatic ties between China and the United States, and the bilateral relationship grew steadily in the past 40 years, said Mr. Wei in a speech at the 18th Shangri-La Dialogue.“The most valuable lesson we have learned from the four-decade-long relationship is that cooperation benefits the two sides while confrontation hurts both,” he said.Agreements on making their relationship a stabilizer for the overall relations, and maintaining regular communication on the strategic level through continued communication are some important issues agreed on, by the Chinese minister said the militaries of the two countries.In a candid and practical discussion between Mr. Wei and US Acting Secretary of Defence Patrick Shanahan on May 31, they reaffirmed the importance of maintaining communication and developing a constructive military-to-military relationship.In terms of managing risks and preventing conflicts, Mr. Wei said military conflicts or even a war between China and the United States would bring disasters to both countries and the world.“It takes two to cooperate, but only one to start a fight,” he said. “We hope that the US side will work with us towards the same goal, follow the principles of non-conflict, non-confrontation, mutual respect and win-win cooperation, and steer the China-US relations in the right direction.”At the 18th Shangri-La Dialogue, which opened on May 31 Mr. Wei leads the Chinese delegation to discuss the security situation and challenges in the Asia-Pacific.The Shangri-La Dialogue, officially known as the Asia Security Summit, has been organized and convened annually by the British think tank International Institute for Strategic Studies and the Singaporean government since 2002.

CIIE holds 2nd expo to attract SMEs, private enterprises.

SHANGHAI: Nationwide purchasers, particularly small- and medium-sized enterprises (SMEs) and private companies will be invited to the 2nd China International Import Expo (CIIE) to share the fruits of the exposition.Sun Chenghai, vice-director of the CIIE Bureau said they have launched a road show on May 30 which will help SMEs and private enterprises become familiar with advanced technologies and better understand overseas markets.This November will see the second CIIE be held in Shanghai.In November last year, a total of 172 countries, regions and international organizations and more than 3,600 enterprises participated in the first CIIE.

5G commercial-use licenses to be granted by China

BEIJING: 5G licenses for commercial use will soon be granted. In the country, China’s Ministry of Industry and Information Technology (MIIT) said on June 3 By combining independent innovation and open cooperation, China’s 5G industry has built a competitive edge, the MIIT said, adding that 5G standards are unified international standards jointly established by global industry players and now more than 30 % of the standard essential patents for the technology are owned by China. With deep involvement of foreign enterprises including Nokia, Ericsson, Qualcomm and Intel in the experiment of the technologies, and thanks to the joint efforts from various parties, according to the MIIT, China’s 5G is ready for commercial use.The MIIT said China, as always, welcomes enterprises at home and abroad to actively participate in the building, application and promotion of its 5G network and share the sector’s development dividends.

Willingness shown by China, Mexico to step up trade talks with U.S.

While the Trump administration took to the airwaves to defend its use of tariffs to gain concessions from trading partners, China and Mexico both signalled a willingness to negotiate with Washington over escalating trade issues.Beijing released on Sunday a government policy paper on trade issues, accusing Washington of scuttling the negotiations, which broke down in all but name in May. It said the Trump administration’s “America First” program and use of tariffs are harming the global economy and that China wouldn’t shy away from a trade war if need be. But throughout the document and at a briefing, the government suggested a willingness to return to negotiations.“We’re willing to adopt a cooperative approach to find a solution,” Vice Commerce Secretary Wang Shouwen said in Beijing on Sunday.Following the Trump administration’s threat last week to impose tariffs on all Mexican goods entering the U.S. if the Mexican government fails to take aggressive measures to stem the flow of immigrants through Mexico and into the U.S. Mexico, meanwhile, rushed a delegation to the U.S. to discuss immigration issues.“Mexico is sending a big delegation to talk about the Border,” President Trump wrote on Twitter on Sunday afternoon. “Problem is, they’ve been “talking” for 25 years. We want action, not talk. They could solve the Border Crisis in one day if they so desired.”“Otherwise, our companies and jobs are coming back to the USA!” he said.With the U.S. threatening to apply an escalating 5% tariff on all Mexican imports, or about USD350 bn of goods, starting June 10, face the possibility of hefty new tariffs in the coming weeks while also threatening a 25% tariff on an additional USD300 bn of Chinese imports that could begin later in the month the Trump administration is aggressively using tariffs to gain concessions on two fronts. China and Mexico—the two largest sources of U.S. imports.Beijing’s modulating rhetoric over the weekend took the form of a government policy paper on trade issues. The tone, if not the substance, was markedly more measured than the sharp, at times nationalistic, rhetoric adopted by state media and some officials in the past three weeks, and Chinese trade experts said the point is to signal talks can resume, though the onus is on the U.S.During the coming weekend in Japan though no talks are currently scheduled, senior U.S. and Chinese finance and trade officials are expected to attend meetings of the Group of 20 major economies. Many analysts on both sides view a possible meeting between Mr. Trump and President Xi Jinping of China at the G-20 summit as a chance to put talks back on track. A researcher at the state-backed think tank China Center for International Economic Exchanges Mr. Zhang Yansheng said, China “is expressing its wish to work together”.The White House declined to comment on Sunday.

Ahead of U.S. Tariffs on Mexico Products Logistics Operators Brace for Import Rush

In order to get ahead of threatened new tariffs, some importers have started considering moving goods more quickly into the U.S. from Mexico, a logistics operator said Friday, raising the prospect of a shipping surge to border crossings already marked by heavy congestion and tight trucking and warehousing capacity.“We started getting calls first thing this morning,” said Mr.Frank McGuigan, chief executive of Frisco, Texas-based Transplace, a transportation management and logistics operator with large operations along the southern U.S. border. “These are major companies who are saying they need to start moving their goods. It’s happening today.”“Shippers are saying, ‘What are our options?’ Right now, you need capacity and you need speed. This is the very definition of supply-chain disruption,” Mr. McGuigan said.Starting June 10 the Trump administration said on Thursday that it would impose 5% tariffs on all Mexican imports unless Mexico stems the flow of undocumented migrants to the U.S. The tariffs would escalate by 5 %age points each month, reaching 25% by October, the administration said.The primary concern of several trucking industry executives is over the long term if tariffs continue to rise and manufacturers shift production or seek new suppliers to minimize the impact of the levies.“It won’t be like day one the sky will fall,” said Mr. Tommy Barnes, president of project44, a Chicago-based provider of tracking technology for trucking shipments. “It’s going to cause some challenges, it will be choppy.” In the second half of 2018 if companies pull forward inventory similar to the heavy importing from Asia that strained warehouse capacity in Southern California, that will include delays and congestion Mr. Barnes said. Over the long term, companies may move production, although “supply chains are not that nimble, not that flexible. It’s not like you can move a manufacturing location tomorrow,” he said.“If these tariffs stick around into mid-August and September, that could have a significant impact,” said Mr.Gary Nichols, director of business development at trucking management firm OHT Services and a veteran of the U.S.-Mexico cross-border transportation operations.Over the past two years during the negotiations for the now-completed pact between the U.S., Mexico and Canada to replace the North American Free Trade Agreement, U.S. goods trade with Mexico has remained robust despite tensions between Mexico City and Washington. According to the U.S. Bureau of Transportation Statistics, trucks carried nearly 70% of the goods trade by value across the U.S.-Mexico border last year, and the trade rose 10.2% in 2018 over the previous year. Significant investment in warehouses near border crossings have been prompted due to the strong trade flows, but Mr. McGuigan said the demand has outpaced supply. “The timing is pretty challenging,” he said. “We’re already tight on northbound trucking and we’re already tight on warehouse capacity, so you’re going to have to find a way to move goods further inland just to be able to store them.” Earlier this spring when U.S. Customs and Border Protection moved some agents from the checkpoints to work with Border Patrol agents, truck shipments were slowed sharply. If the new threatened tariffs trigger a surge in northbound demand, those backups which have eased could return. “If we have to go through another pull-forward, we’re talking about levels of congestion that I’m not sure we’ve seen in the last 10 years,” said Mr. Eric Fuller, chief executive of Chattanooga, Tenn.-based trucking company U.S. Xpress Inc.

Shifts to Lower Gear in Freight Market

A cloud is being cast over the U.S. freight market due to sagging prices and mixed economic signals as bad weather and trade concerns bog down the spring shipping season. According to transportation experts, and some freight-industry measures, just at the time when freight operators start gearing up for a seasonal shipping surge that typically peaks between July and September, demand for moving consumer products, industrial parts and other goods has been pulling back.Shipping rates soared at a double-digit pace, battering transportation budgets for many companies. The softer market is a contrast with last year’s freight boom, which saw retailers and manufacturers scrambling to find space on trucks. As compared to 2018, this year, cargo volumes have moderated and trucking capacity is more readily available, giving shippers more leverage on price.According to online freight marketplace DAT Solutions LLC. Prices on the spot trucking market, where businesses book last-minute transportation, were down 16% in April compared with the prior year.Continuing its fifth straight month in negative territory, the Cass Freight Index for shipments dropped 3.2% in April. Cass Information Systems Inc handles freight payments for companies and produces the monthly index, and it says the weakening numbers could signal a possible broader economic contraction.Uncertainty in U.S. trade and poor weather this year has disrupted supply chains amid sharp swings in shipping demand shown by other measures. The American Trucking Associations’ for-hire truck tonnage index jumped 7.4% from March to April after declining the previous two months.“I think we’ve got enough freight in the pipeline to feed us through Fourth of July weekend,” said Mr. Mark Montague, DAT’s senior pricing analyst. “I’m really afraid it could fall off in July and August,” he said, if shipping volumes fail to pick up in June and no trade deal materializes.While U.S. retail sales declined in April and factory activity slowed, inventory levels have been creeping back up at businesses that push goods through logistics networks.As they wait for clarity on U.S. negotiations with China and other key trading partners, shippers remain cautious, with many companies holding back on spending said Ms. Allison Landry, a transportation analyst with Credit Suisse AG.“The environment is really uncertain,” Ms. Landry said in an interview. At a recent rail shipper conference, she said, “the common phrases I heard over and over were, ‘We’re going to wait and see what happens’ and ‘I hope we don’t talk ourselves into a recession.’”Freight volumes declined and trucking capacity loosened as fleets that ploughed their 2018 gains into record equipment orders took delivery of new big rigs, the year got off to an uneven start. With logistics networks swamped due to severe flooding across the Midwest at a critical period for agriculture shipments, while cool, wet weather in California put a damper on the start of the produce season.Tenn.-based trucker Covenant Transportation Group Inc., Chattanooga, whose customers include Amazon.com Inc., lowered its first-quarter profit outlook, in March, citing inclement weather and softer demand after shippers pulled freight forward in late 2018 to avoid expected tariff increases. Carriers including J.B. Hunt Transport Services Inc.,Schneider National Inc. and U.S. Xpress Enterprises Inc. also cited bad weather among factors weighing down first-quarter results. First-quarter adjusted operating income jumped 15% compared with 2018, at Knight-Swift Transportation Holdings Inc., the largest truckload carrier in North America. But the company cut its overall profit outlook for the second and third quarters as tractor productivity fell. According to the Association of American Railroads, railroad volumes declined in each full month from February to April,. So far this year, only petroleum and petroleum products among railroads’ major commodities have increased from a year ago.Analysts caution that last year’s freight market set an unusually high bar for growth in 2019. Compared with cargo volumes and prices in 2017, “the 2019 data isn’t nearly as bad as people are making it out to be,” Cowen & Co. analyst Mr. Jason Seidl said in a May 22 research note.As companies move some production from China to Southeast Asia or Latin America shifting supply chains have also “contributed to the unsteadiness in transports,” and the impact will extend “throughout the first half of 2019, at a minimum,” Mr. Seidl said.ACT Research says truckload rates are still expected to drop 5% by the end of the year,. “With the industry aw ash in capacity, trucker profitability is expected to roll over in earnest by the second half of 2019,” said ACT President Kenny Vieth. “There are some strong headwinds.”

Africa News

USD 750mn approved for Kenya’s growth by World Bank

To support the government of Kenya, an International Development Association (IDA)credit of USD 750 mn has been approved by the World Bank Board of Directors for enhancement of inclusive growth, accelerate poverty reduction and to achieve its Vision 2030 objective of becoming a middle-income industrialised country.
This is to give an impetus to the ‘Big Four’ agenda of the government which prioritises agriculture, affordable housing, universal health coverage and manufacturing. Critical reforms that will enhance competition and market transparency, reduce corruption opportunities and help Kenyan farmers to achieve higher productivity and to increase their incomes in agriculture by the Kenya inclusive growth and fiscal management development policy financing facility will be supported.Better targeting of subsidies for agricultural inputs to reach the intended beneficiaries (using e-vouchers and biometric digital identification), reducing inefficiencies and leakages in the procurement and marketing of fertiliser and establishing a warehouse receipt system and a commodities exchange to help farmers get easier access to credit and to reduce post-harvest losses are the reforms supported by the facility.In creation of a national digital id and pushing for access of internet services to all Kenyans comes across the support to digitisation advancement with which the facility will enhance service delivery by the government to its citizens, and reduce the need for face-to-face interactions and corruption opportunities.Major regulatory constraints that developers face will be removed to help them lower construction costs and thereby increase the supply of less-expensive housing units, in housing construction. Long-term home loans will now be available thanks to the reforms supported by the operation and they will catalyse the development of the housing finance market in Kenya, which is expected to triple the proportion of households in Kenya who have access to a mortgage.The government’s medium-term fiscal consolidation plan will get an impetus by supporting measures to improve revenue mobilisation, public expenditure and the prudent management of Kenya’s debt. Reforms to enhance the private sector’s participation in the inclusive growth process are also supported. “Measures supported by this operation are expected to benefit ordinary Kenyans through better targeting of agricultural subsidies to reach low-income farmers, prosecuting those who engage in fraudulent procurement practices, increasing availability of affordable housing, and improving revenue mobilization. This operation creates a foundation for essential reforms for fighting corruption, liberalising markets and enhancing inclusive growth,” said Mr. Felipe Jaramillo, country director for Kenya in World Bank.

Tangiers receive car transport wagons

The Moroccon port of Tangiers received a shipment of 16 GEFCO car transport wagons from Montoir-de-Bretagne in France. The wgons were loaded first onto Mafi trailers and then into the hold of Spirit of Motoi by Ro-ro cargo specialist Somaloir. The ship sailed between Mentor, Tangiers, Tunis, Naples and Cadiz on the Milk Run Med line rotation operated by LD Seaplane (a subsidiary of Louis Dreyfus Armateurs).Able to carry up to 10 vehicles, the wagons were refurbished in France and will be used between Kenitra and the port of Tangier 200 km away.The soon-to-be opened plant in Kenitra will manufacture 100,000 cars annually, 25,000 of which will be bound for Montoir in 2020, informed a statement from LD Seaplane.In June 28 car transport wagons will be shipped to Morocco and more in autumn.

PETN project receives first turbines

A shipment of Vestas wind turbine components reached Port Autonome de Dakar in Senegal for Lekela, a renewable power generation company and is now being taken by road to the Parc Eolien Taiba N’Diaye (PETN) wind farm in Senegal.December 2018 saw the beginning of construction of the 158.7 MW wind farm which will consist of 46, 3.45 MW turbines. Each turbine will have a hub height of 117 m and blades measuring 61.7 m.Senegal’s installed power generation will increase by 15% when later in the year PETN is expected to begin transmitting to the grid.Lekela, Senegal General Manager Mr Massaer Cisse said, “This is an incredibly exciting moment for Lekela, and for PETN. From a project that was just an idea a few years ago, we now see it quickly becoming a reality. It won’t be long until PETN will be providing power for over two mn people in Senegal.”

Three South African renewable projects by Globeleq reach financial close

Globeleq Generation Limited has reached financial close for its three renewable energy projects in South Africa including the 138MW Jeffreys Bay Wind Farm on the Eastern Cape, 50MW photovoltaic (PV) solar farm in De Aar and the 50MW PV solar farm in Droogfontein.
Construction is expected to commence shortly and all projects should be fully operational by mid-2019.The three projects are part of the Government of South Africa’s groundbreaking renewable energy IPP procurement Programme and are among the very first large scale renewable power plants to be built in the countryIn a consortium comprised of Mainstream Renewable Power, Thebe Investment Corporation, local engineering firms Enzani Technologies and Usizo Engineering and local community trusts have Globeleq as their strategic equity partner. An additional consortium member in the Jeffreys Bay Wind Farm is Old Mutual IDEAS Fund. A joint venture between Mainstream Renewable Power and Genesis Eco-Energy were the original developers of the projects.Chief Executive of Mainstream Renewable Power Mr. Eddie O’Connor said, “Mainstream Renewable Power is delighted to have achieved this significant milestone. The South African government has shown tremendous vision and foresight in creating this new and sustainable industry for South Africa, firmly placing it on the world map for renewable energy generation.”A syndicate of lenders led by ABSA and Barclays financed the projects on a limited recourse basis. The Development Bank of Southern Africa (DBSA) and local institutional investors are the senior lenders. Globeleq and its consortium partners will invest with equity. Black Empowerment shareholders of the projects and the community trusts are being backed by DBSA.Expected to generate hundreds of jobs during construction, the projects once operational will benefit the local community through socio-economic and enterprise development programmes from their revenues. Set to produce 635 GWh of electricity annually, enough to supply up to 48,000 households, they will displace approximately 628 thousand tonnes of carbon emissions.Siemens will construct the two 50MW solar projects under a lumpsum turnkey EPC contract. The Jeffreys Bay Wind Farm will be constructed by Siemens and a South African consortium of Murray & Roberts and Conco. Mainstream and Globeleq Construction will jointly manage all the three projects.ARB Apex Bank renews contract with Temenos for inclusive bankingARB Apex Bank has decided to continue its mission to provide banking and non-banking services for Ghana’s Rural and Community Banks (RCB’s) and their customers by renewing its contract with Temenos.With more than 700 branches connecting 144 rural and community banks in Ghana, the bank, acts as the mini-central bank for Ghana’s RCBs. Temenos Infinity, the breakthrough digital banking product and Temenos T24 Transact, the next generation core banking .system as well as a host of additional ones including Risk and Compliance and Temenos Payment Hub are some of the solutions that ARB Apex Bank is opting for Recognized as part of the “Best in Banking Awards” held at the Temenos Community Forum in The Hague in April 2019, ARB Apex Bank was recently also awarded the “Best Inclusive Banking” prize. This award recognizes ARB Apex Bank for delivering a truly customer-centric experience and for passing on its operating costs efficiencies to its end-customers in the spirit of financial inclusion. ARB Apex Bank established in Ghana in 2000 after receiving its banking license in 2001 and became a Temenos client in October 2009. With 11 branch offices throughout the country currently ARB Apex Bank hosts over 140 Rural and Community Banks (RCBs) on a private cloud, run from their premises in Accra, Ghana. ARB Apex Bank Managing Director Mr. Kojo Mattah, said, “With Temenos banking software, we gain operational efficiencies and we can offer seamless and compelling banking experiences. We want our customers to feel confident and proud to walk into the banking halls of our RCBs and receive outstanding products and services.” Temenos Managing Director for the Middle East and Africa at Temenos, Mr. Jean-Paul Mergeai said, “Temenos cloud-native, package and functionally rich offering which is also tailored for the needs of inclusive banking will help the bank towards its admirable vision of increasing customer satisfaction and offering access to financial services to the broader population.”

Morocco to get 800 MW solar power plant to be built by Masdar and EDF

The has awarded The 800MW Noor Midelt I solar project was appointed by the Moroccan Agency for Sustainable Energy (MASEN) to a consortium led by French company EDF.
EDF is leading the consortium through its EDF Renewables subsidiary. Other partners include the UAE-based renewable energy company Masdar and Moroccan independent power producer Green of Africa.Located in the high plains surrounding the Moulouya River and between the Middle and High Atlas Mountains the plant will be located 20-km north of the town of Midelt in central Morocco.EDF Renewables and Masdar will be teaming up for the third time on the Noor Midelt Phase I project. According to a statement from Masdar, project construction will commence in Q4 2019 and it will supply energy to the grid in 2022. EDF Renewables is a partner in Shua’a Energy 2, the joint venture led by Dubai Electricity Water Authority (DEWA) developing the 800MW third phase of the Mohammed bin Rashid Al Maktoum Solar Park in Dubai, the first 200MW stage of which was inaugurated in April 2018.Masdar CEO Mr. Mohamed Jameel Al Ramahi, said, “This project marks a key step in the transition of renewable energy from its traditional peak-shaving role in meeting power demand to becoming a baseload electricity provider in the future. Through a shared commitment to commercialising advanced clean technology with our partners, Masdar is helping to bring another world-first in renewable energy to the Mena region.” Masdar has helped nearly 20,000 homes in Morocco with solar panels and household appliance installations. Besides, renewable energy access to more than 1,000 villages has been extended by the Morocco Solar Home Systems (SHS) project led by the Office National de l’Electricité et de l’Eau Potable (ONEE). Al Ramahi added, “It is now cheaper to build renewable energy power plants than those based on fossil fuels and this is increasingly evident in the region.”

Nairobi’s first network launched by KOKO

KOKO Network a venture-backed technology company has launched its first network of 700 ‘KOKOpoints’ inside neighbourhood shops across Nairobi
The USD 20bn or more worth African urban cooking fuel market is worth more than USD 20 bn remains dominated by polluting fuels like charcoal that are produced through deforestation and cause mns of early deaths through indoor air pollution. Now with KOKO’s market-leading technology platform bioethanol cooking fuel can scale rapidly by undercutting dirty fuels. Customers use smart canisters that dock with KOKO points to dispense fuel they have pre-purchased via M-PESA. The smart canister are then taken home to dock into their KOKO Cooker, a modern, high-power 2-burner ethanol stove that delivers clean heat for modern cooking at an affordable price. KOKO CEO and co-founder Mr. Greg Murray said, “Many fast-growing cities face unique challenges that innovative technology can solve. KOKO has created the infrastructure for inventing, producing and delivering hardware and software solutions that improve life in the city. Kenyans have a strong reputation for embracing innovation and we are proud to partner with the shopkeepers of Nairobi in launching our first Network.” Vivo Energy Kenya has teamed up with KOKO to deliver fuel. The former is the company which owns and operates Shell-branded fuel distribution infrastructure. The technology platform of KOKO imparts major cost efficiencies when partnered with the downstream fuels industry, eliminating the need for a centralised bottling facility and disposable plastic bottles to make clean fuel available closer to customers. The KOKO Network partners with 700 shops which function as pick-up points for the KOKO Cooker. With this a low-cost e-commerce experience has been created which has solved the last-mile challenges that typically drive up costs for customers. To enable major brands to engage Nairobi consumers through targeted and interactive video and in-store radio, overcoming the challenge of high smartphone data costs that limit the reach of traditional online media channels, the company has launched KOKO Digital Media.

IMF’s e-GDDS implemented by Equatorial New Guinea

By publishing critical data through the National Summary Data Page (NSDP) Equatorial Guinea has implemented the recommendations of the IMF’s Enhanced General Data Dissemination System (e-GDDS)
Essential macroeconomic data relating to national accounts, government operations and debt, monetary and financial sector and the balance of payments will be published on the page, which will be disseminated in both human and machine-readable formats. IN May 2015 IMFs Executive Board devised the e-GDDS to support improved data transparency, encourage statistical development, and help create synergies between data dissemination and surveillance. National Statistics Office’s website posts NSDP using the Statistical Data and Metadata Exchange (SDMX) and is accessible on the IMF’s Dissemination Standards Bulletin Board. National policymakers and domestic and international stakeholders, including investors and rating agencies get easy access to essential macroeconomic data through the NSDP. This data has been identified by the IMF’s Executive Board as critical for monitoring economic conditions and policies. Being accessible in both human and machine-readable formats will give users simultaneous access to timely data and will bring greater data transparency. Louis Marc Ducharme, IMF’s Statistics Department Chief Statistician and Data Officer Mr.Louis Marc Ducharme commented, “I am confident that Equatorial Guinea will benefit from using the e-GDDS as a framework for further development of its statistical system.”

World News

Port deal with India, Japan signed by Sri Lanka

COLOMBO:On 28th May Sri Lanka signed a deal with India and Japan to develop a deep-sea container terminal in the country that has seen increasing forays by China which has taken a strategic port on a 99-year lease that has worried New Delhi. The East Container Terminal at the Port of Colombo will be jointly build by the three countries. Sri Lanka's Port Authority (SLPA) said that while India contributed almost 70 per cent of Colombo Port's transhipment business, Japan had cooperated since the 1980s to develop the port's container terminals.100 per cent ownership of the East Container Terminal is retained by SLPA. The jointly owned Terminal Operations Company (TOC) conducts all East Container Terminal operations is; Sri Lanka retains a 51 per cent stake, and the joint venture partners purchase a 49 per cent stake.

India retains its position as world’s fastest growing economy

Paris :As the Chinese economy is impacted by its escalating trade war with the US, a recent report by the Organization for Economic Cooperation and Development (OECD) sees India’s status as the world’s fastest growing economy widening in the coming two years.According to OECD, as the Modi-led government takes charge for a second term, with the economy as a top priority, India’s GDP is estimated at about 7.25 per cent in 2019 and rising to 7.5 per cent by 2020.India has the fastest growth among G20 economies. Accommodative monetary policy and additional fiscal support will boost economic growth despite subdued demand from partner countries, the report said. Aiding this will higher domestic demand, fiscal and quasi-fiscal stimulus, including new income support measures for rural farmers, and recent structural reforms. Pressures on inflation and the current account deficit, will reduce at the same time the report added, owing to a fall in oil prices and the appreciation of the rupee.

3.9% growth in 2018 in global freight forwarding market

LONDON:Traditional forwarders will rapidly lose customers looking for better visibility, quotation and easy booking options if they don’t recognise online forwarding disruptors as a catalyst of change. A market-wide survey saw 49% of shippers taking part in an online forwarding platform. Survey respondents say by 2023, nearly one fifth (18.7%) of volumes are expected to be booked/shipped through online forwarding platforms. 2018 saw global freight forwarding market grow at 3.9%. Though growth slowed from the levels seen in 2017, the expansion is still one of the fastest seen since 2010. Characterised by uneven change digital forwarding platforms are rapidly gaining traction in a global forwarding market. Through to visibility tools and ‘control towers, technology is creating a vast range of forwarding options available to shippers across the globe from online booking and quotation. However, “perhaps the most salient characteristic of the present freight forwarding market is that it has not seen a greater level of change. Markets and technologies have both developed significantly, but the overall landscape is broadly similar to that in the previous ten years and there appears to be little drive within the sector to change things fundamentally” said Thomas Cullen. In the global forwarding market, the Ti report finds tech-enabled forwarders serve as a catalyst for change, but the extent to which online marketplaces, booking platforms and digital forwarders will fundamentally change the market’s landscape is. still under question. However forwarders who do not prove agile in their adoption of new technology, will certainly rapidly lose customers looking for the types of visibility, quotation and easy booking which digital forwarders can provide. The extensive market-wide survey carried out for the report supports this conclusion. It found that not only had 49% of participating shippers used an online forwarding platform, but that respondents expect nearly a fifth (18.7%) of all their volumes to be booked/shipped through such a platform by 2023.

China said to be using non-tariff barriers to retaliate

Washington :As a result of the increasingly bitter trade war between Beijing and Washington, China is increasingly resorting to non-tariff barrier retaliation like increased government inspections, slower Customs clearance and slower approval for licensing and other applications, says the American Chamber of Commerce of China and its sisterbody in Shanghai, citing a recent survey of members on the impact of tariff hikes, as per a report.The report also points out that 40.7 per cent of respondents were considering or had relocated manufacturing facilities outside China, and around one-third of companies said they were increasingly focusing their China operations on producing for Chinese customers and not for export.

Glycine imports from India, China Japan hurting US industry, says trade body

Washington :Sale of import of glycine (an amino acid) from India, China and Japan at less than fair value in America is hurting the US industry badly, the United States International Trade Commission (USITC) said. The US industry was materially injured by imports of glycine from India and Japan, the USITC said. It also determined that glycine was sold in the US at less than fair value and the imports are subsidised by the governments of China and India.The US Department of Commerce is expected to issue anti-dumping duty orders on imports of this product from India and Japan as well as countervailing duty orders on imports from China and India, as a result of the USITC’s affirmative determinations, an official statement said, as per a report.

1,097 points fall in Baltic Dry Index

London:The Baltic Dry Index (BDI) decreased by 10 points, reaching 1,097 points on Thursday, May 30, 2019. The BDI, an index based on a daily survey of agents all over the world, covers prices for transported cargo such as coal, grain and iron ore and is compiled by the London-based Baltic Exchange,. Its peak was 11,793 points on May 20, 2008, with the lowest level ever being 290 points on February 10, 2016.

Manning costs see continuing moderate rise

London:According to the latest Manning Annual Review and Forecast report published by global shipping consultancy Drewry, manning costs have risen moderately over the past 12 months, checked by easing officer supply shortage, and are forecast to rise at a similar pace over the next five years.For a second successive year in 2019 manning costs have risen, but the pace of growth remains moderate and well below the prevailing rate of price inflation. Meanwhile, the shortfall in available officer numbers relative to demand has declined close to equilibrium and is expected to reach a small surplus by 2024, but ratings remain in surplus and are expected to remain so, said an analysis on the report.While there were some pockets of higher wage increases, these were focused on the growing LNG sector, otherwise overall manning costs have remained subdued, said Drewry’s senior manning analyst Mr Rhett Harris. Certain ranks and experience levels continue to be in tighter supply than the manning market as a whole. These tend to be for experienced senior officers and, in particular, second engineers. Aggregate manning costs rose by around 1 per cent in 2019, well below the prevailing rate of price inflation, with both ratings and officer pay rising by the same margin, as per Drewry estimates. This follows a similar rise the previous year and flat lining costs in 2017, as the depressed state of most cargo markets made wage increases almost unaffordable.  The report said shortage of officer supply versus demand is narrowing, and lower-than-anticipated fleet growth is at the core of this.However, it remains a finely balanced position with the supply side easily tipped if wages for sea service do not remain competitive compared to shore-based work, added Mr Harris. The big social differences between working at sea and ashore are central to this consideration, as well as the fact that young people are now less willing to make compromises for work than previous generations. The commercial environment remains challenging and the economic outlook increasingly uncertain with plenty of downside risk while shipping markets are improving. Hence, despite planned increases in collectively agreed base pay scales, seafarer wage inflation is expected to remain well below the prevailing rate of consumer price inflation over the next five years says Drewry. Continued pressure to reduce costs combined with improving officer supply conditions will negate incentives to raise salaries. However, there will be some variation between the different sectors. Costs for crewing dry and container vessels will likely rise at a slower pace, but in sectors such as LNG and chemicals where there is competition for scarce officers certified to crew specialist ships, higher cost inflation is anticipated, concluded Mr Harris.

As new contracts are finalised, contracted freight rates seen up in May for containership segment

Oslo :A jump in long-term contracted rates for containership operators during May 2019 has been revealed by Oslo-based Xeneta, the leading ocean freight rate benchmarking and market analytics platform, , as 2018 rates expire and new contracts push the index upwards. Global rates leapt by 11.5 per cent across the month, with US rates for imports climbing by close to 20 per cent according to the latest XSI® Public Indices report—based on crowd-sourced data covering over 160,000 port-to-port pairings, with 110 mn data points. Following a dire April for contracted liner business, with the indices at that point slumping by 4.2 per cent (after two months of increases) the increase goes to show the increasingly ‘topsy turvy’ nature of the freight rates landscape, according to Xeneta CEO, Mr Patrik Berglund.

Eye-catching development

May’s XSI public index sees an increase based on what was contracted in April. We’d already started seeing contracts populating the platform at higher levels than last year at that point, particularly for the Trans-Pacific, and that has helped propel this increase, he comments, adding that the sharp rise has taken the indices to its highest point since its inception in 2017. This is the largest single monthly gain for the benchmark and puts it 11.7 per cent up year-on-year, with a rise of 7.5 per cent since the start of 2019. A 18.8 per cent month-on-month increase in the US import index, was arguably the most eye-catching change while exports climbed by a more modest 1.5 per cent. This figure was mirrored by a 1.7 per cent rise in the European import benchmark, whereas exports grew by a more noteworthy 6.7 per cent, notably on the Europe—to both US coasts and exports to Brazil. Interestingly, the Far East import index bucked the trend, declining by a significant 14.2 per cent (leaving it 17.2 per cent down year-on-year). However, the regional export figure jumped by what Berglund calls a massive 15.9 per cent.

Complexity understood

The Xeneta CEO points out it is,, an increasingly complex picture, with a multitude of factors constantly redefining developments. One issue, he states, nevertheless, looms large across the segment:The China-US trade war. The factors feeding into the industry are too manifold, too interweaved, to identify one all-consuming ‘culprit’, but it’s clear that the tit-for-tat tariffs that are being levied by the world’s two largest economies are influencing the world’s number one mode of transporting goods. He continues: With the US import index rising so spectacularly, and being, very nearly, matched by the Far East export benchmark, it suggests that shippers may be moving to take advantage of a window of opportunity before further threatened tariffs (on USD325 bn of Chinese goods) come into effect. Mr Berglund continues: Front loading due to the tariff scare raised short-term rates, making it a favourable seller market, but now rates have started dropping again. As those rates dropped, BCOs and carriers settled long-term contracted rates on the back of an artificially healthy short-term market.The clear winners for the Trans-Pacific contract season are the shippers who have held off concluding their negotiations, as well as carriers, who on the flip side grasped on to early contract conclusions. Unfortunately, buyers who settled contracts early on, or mid trans-Pacific contract season, will not reap the benefits as the dust settles from the short- term market.

Intelligence pays

The increased costs however, related to the tariffs may have a longer-term impact on demand, says,Mr Berglund, meaning the positive development might be shortlived. Apart from the two superpowers, there remains serious questions relating to the impact of Brexit, not to mention ongoing uncertainty over a number of broader socio-economic and geo-political issues.It’s getting harder and harder to make accurate predictions concerning freight rate developments, and more and more important to keep abreast of the very latest segment intelligence, he concludes. By monitoring the market closely, all stakeholders can negotiate from a position of informed authority, getting the optimal value for their assets and cargoes. Without that insight, it’s all too easy to get left behind.Stay informed, stay ahead. That’s my advice. It’s the most anyone can do in this rapidly changing environment. The release added Xeneta provides unique insight into ocean freight rates by crowdsourcing the very latest rates from leading global shippers.

Analysts: Between China US, box cargo volume to fall sharply

LONDON :At Drewry Maritime Research here analysts expect cargo volumes to fall precipitously between China and the US after America increased tariffs on a range of Chinese exports.Based on a previous impact analysis, Drewry calculates that a 10 per cent increase in US import prices of goods from China results in a six per cent decline in TEU volume from China to the US over time. With tariffs of 25 per cent, the potential TEU contraction would be around 15 per cent for that leg alone, the analysts said. It is estimated that the trade war will wipe one per cent off global container volume growth this year, by a leading container line executive last week, dragging down previous forecasts. Although Drewry conceded that some exports out of China would find their way to the US via alternative sourcing countries, these would be unlikely to make up the shortfall, said a report.

Preferential Trade Status for India under GSP terminated by Donald Trump

WASHINGTON:After determining that it has not assured the US that it will provide equitable and reasonable access to its markets, President Donald Trump has terminated India’s designation as a beneficiary developing nation under the key GSP trade programme. Trump said The Generalized System of Preference (GSP) is the largest and oldest US trade preference programme and is designed to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries."I have determined that India has not assured the US that it will provide equitable and reasonable access to its markets. Accordingly, it is appropriate to terminate India’s designation as a beneficiary developing country effective June 5, 2019, This proclamation was made recently by Trump, ignoring the plea made by several top American lawmakers as it will cost American businesses over USD 300 mn in additional tariffs every year. The intention of the US to terminate India’s designations as a beneficiary developing country under the GSP programm was announced by Trump on March 4. The 60-day notice period ended on May 3.In order to ensure that US companies have a level-playing field, the Trump administration has prioritised working with the Government of India a senior State Department official told reporters, hours after Narendra Modi was sworn in as Prime Minister for a second time following his spectacular electoral victory in the general elections.Nearly 2,000 products including auto components and textile materials can enter the US duty-free under the GSP programme if the beneficiary developing countries meet the eligibility criteria established by Congress.According to a Congressional Research Service report issued in January, in 2017 India was the largest beneficiary of the programme with USD 5.7 bn in imports to the US given duty-free status and Turkey the fifth largest with USD 1.7 bn in covered imports.

Official new shipping route from Kandla, India to Qeshm, Iran established

TEHRAN:With the arrival of a cargo ship named Neshat in Qeshm a new shipping route between the seaport of Kandla in Western India and Iran’s Southern Qeshm Island has been officially established. A general cargo ship measuring 174 meters in length and 26 meters, Neshat carried 13,000 tonnes of commercial goods from India to Qeshm and docked at Kaveh International Port. Iran and India launched a shipping lane in January from India’s Mumbai to Mundra Port, Kandla, Iran’s port city of Chabahar and the port city of Bandar Abbas.India is among Iran’s major trading partners. Trade between Iran, India stood at 10.37 mn tonnes worth USD4.63 bn in the last fiscal year (2018-19) to register a 10.78% and 7.14% decline in tonnage and value respectively year-on-year. Iran exported 8.36 mn tonnes of goods worth USD2.04 bn to India, down 14.95% and 25.34% in tonnage and value respectively y-o-y.During the period India was Iran’s seventh biggest export destination in the world. Exports to India from Iran mainly included methanol, urea, ammonia and bitumen. The country imported 2.01 mn tonnes of commodities worth USD2.59 bn from India, up by 12.04% and 14.91% in tonnage and value respectively y-o-y, which mainly included semi- and wholly-milled rice, tea, graphite electrodes used in furnaces and oilcake. India was the fourth largest exporter to Iran last year.

Drewry:Business case for scrubbers will ‘disappear in later years’

LONDON:As the price spread between high sulphur fuel oil (HSFO) and low sulphur fuel oil (LSFO) will keep on narrowing, the business case for retrofitting scrubbers will eventually “disappear” according to Drewry Maritime Research.While financially it will be sensible for shipowners to use scrubbers in the first few years starting 2020 when the IMO fuel sulphur rule is to be enforced, there is no long term benefit in the use of the exhaust gas cleaning system. “Although there is still high uncertainty regarding the possible premium of LSFO over HSFO, the expected tight supply of the compliant fuels suggests that the premium will be strong enough to recover the cost of scrubbers within the first two years,” said Mr. Navin Kumar, Director of Drewry Maritime Research. “We expect the average price premium of LSFO over HSFO to be around USD240 per tonne in 2020, which will gradually decline to close to USD80 per tonne by 2023 once the LSFO supply improves. As the premium in the price of compliant fuel will narrow significantly after the first two years, the business case for retrofitting scrubbers will disappear in later years,” Mr. Kumar said. A scrubber-fitted non-eco VLCC will earn around USD12,500 per day more than a non-eco VLCC without a scrubber in 2020 based on Drewry’s bunker price forecast. By 2023, however, the earnings premium of scrubber-fitted VLCCs will decline to around USD4,000 per day.Even beyond 2023As LSFO will continue to hold the price premium of around USD75 per tonne over HSFO, and scrubber-fitted vessels will continue to earn more than non-eco vessels without scrubbers. Moreover, non-eco scrubber-fitted vessels will be able to compete with modern eco-vessels (around 15% more fuel efficient). Drewry highlighted that in terms of HSFO availability for scrubber-fitted ships, a recent forecast by International Energy Agency (IEA) eases the concerns of shipowners regarding the supply of the high sulphur fuel. According to Kumar, despite the fact that a major chunk of the existing HSFO demand will shift towards the compliant fuel after IMO 2020, demand will still be strong enough to induce bunker suppliers at major ports to continue to offer HSFO. “According to the IEA, demand for HSFO will decline from 3.5m bpd in 2019 to 1.4m bpd in 2020, and will further decline slightly to 1.1m bpd by 2022 with the improvement in VLSFO supply (3.5% sulphur). Nevertheless, during 2022-24, HSFO demand will be surprisingly resilient at around 1.1m bpd, as vessels fitted with scrubbers will support demand. According to the agency, more than 5,000 vessels will be fitted with scrubbers by end-2024,” he said. In terms of gross tonnage currently, about 11% of the global fleet is either scrubber-fitted or pending retrofit.At the same time, about one-third of the vessels in the orderbook will be fitted with scrubbers. The share of scrubber-fitted vessels, including pending retrofit, in large vessels, especially tankers and bulk carriers is high, due to their higher bunker consumption. “While the share is more than 20% for large tankers like VLCCs and suezmaxes, it is above 15% for capesize bulkers, which suggests that bunker suppliers at ports handling these large bulk vessels will continue to supply HSFO,” Kumar said.