Mumbai port indicates buoying world economy

Just more than a year ago, business prospects at the Mumbai port on India's western shore, long known as the principal gateway of India, appeared bleak. Because of the global recession, cargo volumes slumped to 51.8 million tonnes last year, compared with 57 million tonnes in 2008. Revenues more than halved to 1.23 billion rupees (Dh96.7 million) from 2.63bn rupees the year earlier.

Across India's 12 major ports, cargo traffic slowed by 6 per cent as international trade slumped, according to the Indian Ports Association. But this year business is looking up. At the Mumbai port, one of India's busiest ports, with a natural deepwater harbour, traffic is up. Between April and last month, cargo traffic climbed to 14.23m tonnes, a 10.3 per cent growth compared with same period last year.

"Traffic is showing a steady upward trend," said NK Mandal, the director of planning and research at the Mumbai Ports Trust, the government authority that controls the port. The results are just one of several encouraging signs for global trade. At the Port of Singapore, one of the largest in Asia, traffic last year slumped by 13.5 per cent. But for the first five months of the year, container handling volumes were up 14.5 per cent compared with the same period last year, to 14.1 million containers.

One of the best indicators for the global seaborne trade is the Suez Canal, which is used by cargo vessels travelling between Europe, Asia and the Middle East. In 2008, the number of container ships passing through the canal was 478,000, averaging 40,000 vessels a month. It dropped a year later to 401,000 but this year it has been climbing back, with the number of container vessels passing through climbing to 39,000 in May and last month, a significant jump from the 32,000 vessels passing through in February. Mr Mandal is optimistic of further growth as the world climbs out of recession, led by emerging economies such as China and India.

"Traffic will grow more rapidly in the next few years," he said. Buoyed by rising traffic, robust expansion plans were afoot, Mr Mandal added, which include creating dedicated facilities at the port for containers, dry bulk and pre-shipment storage. The port trust is spending 14.6bn rupees to develop an offshore container terminal and expects to complete the project by 2012. Another investment of 18.61bn rupees to develop a cruise terminal big enough to take two ships at the same time is also being planned.

This, he said, would increase traffic to more than 100 million tonnes over the next few years from 54.5 million tonnes today. The Dubai-based DP World, which owns ports as far afield as Callao, Peru and Southampton in the UK, is also reviewing its growth plans. During the boom years, it laid out a global strategy plan to expand to a 90 million annual container handling capacity by 2017. It was forced to put those plans on hold when the global economy crashed but is considering expansion projects depending on market demand, DP World said yesterday.

Economists have predicted surging growth in developing economies in Asia, while mature markets dealing with debt and austerity programmes will see less growth. But in the port of Los Angeles, recent figures also showed a strong bounce-back. The port handled 730,000 containers last month, a 32.3 per cent rise from the same period last year. The UAE's performance for global seaborne trade has been more modest. Container handling at Abu Dhabi's Mina Zayed port declined by 7 per cent in the first half of the year, to 207,000 containers, Abu Dhabi Terminals said on Monday.

DP World's UAE operations, which largely reflect its Dubai ports but include Fujairah and Abu Dhabi, were up 3 per cent, to 5.5 million containers.

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