Mar 21 - 27, 2011

While this has been reported several times in media that slow rate of loading and unloading of bulk cargoes at both Port Qasim and Karachi Port happens to take heavy toll on the performance of the ports altogether, it seems that such pleas fall on deaf ears of port authorities as well as the federal government.

This time around, prolonged stays of vessels aimed to export wheat on berths at the country's two leading seaports are causing serious hassles. Indeed, these stays are draining on resources of the newly established terminal at the Port Qasim.

After a three-year long ban on wheat exports, the government of Pakistan has finally lifted the ban on exports of wheat recently. Reportedly, the government has green-signalled exports of approximately two million tons of wheat. The government is much optimistic about good wheat production for Rabi season 2010-11. It has set 25 million tons wheat production target for the current season. The production is almost 1.5 million tons more than the country's requirements of 23.5 million tons. Rainfalls are the major driver of growth in outputs.

Demands in foreign countries are on the rise and Pakistani wheat is fetching good price of around USD$322 to USD$333 per ton from Bangladesh, Myanmar, Australia, Argentina, Yemen, Philippines, and other international markets reeling under food inflation. Why this sudden shift in the government's priority occurred is a different issue, yet that the government wishes to capitalise on the carryover stocks of last year and earn foreign exchange is related point to our topic.

Price of Pakistani wheat is relatively good as compared to other exporting countries in the world. This has emboldened the likelihood of Pakistani wheat carving out its distinctive place in the foreign markets after a recess. "Pakistani wheat is now competitive," a Singapore-based trader told Reuters last month. He said traders were looking for cornering more stocks.

According to a latest report, so far more than 0.6 million tons wheat has been exported from the Karachi Port Trust (KPT) as well as Port Qasim. However, now the process of wheat exports has slowed down for two important reasons. Firstly, exporters are waiting for a further surge in the prices of wheat in the international markets. The price of wheat has been increasing with each passing day and it seems that it would shoot up to USD$400 per ton in near future. The exporters are also hankering for good price offer from a number of importing countries.

This resulted in congestion of berths right away with vessels lingering on for wheat consignments yet to be arrived from upcountry mainly Punjab. Such congestion called bunching of vessels has not only unnecessarily occupied berths at the two ports, but also disturbed the schedules of importing consignments such as urea. Such overstays have made five ships berthed at Karachi Port and two at FAP terminal and another two at marginal wharf at Port Qasim.

Docking ships at marginal wharf is akin to breach of agreement reached between Port Qasim Authority and FAP (Fauji Akbar Portia Marine Terminals Limited-a joint venture that has lately kick started $135 million fully automated grain and fertiliser terminal at Port Qasim), according to the reliable sources. It is explicitly mentioned in the agreement that PQA would not be entitled to use marginal wharf for berthing since this area is under control of FAP, they said. Ironically, PQA has realised its aberration. However, it has no control over it for the same reason i.e. bunching of vessels at other berths.

Critics said the crowd was being intentionally ignored in order to shift the dry bulk cargo handling operation to KPT. While dispelling the perception that PQA is losing capacity to handle dry bulk cargo because of shortage of berths, the spokesperson of FAP told this scribe the terminal was especially designed to handle dry bulk cargoes of 4.1 million metric tonnes per annum and able to cater for Panamax size vessels of up to 80,000 deadweight tonnage. He also said the congestion had nothing to do with handling capacity but unnecessary occupation of berths by ships waiting in row to be loaded with wheat.

This traffic on marginal wharf is also damaging our commitments with importers, he underscored. "We promise them an 11.3 meter depth that is on the marginal wharf. Now when, the area is occupied, we fear slippage of these consignments to other ports," he explained.

It is not easy to single out a cause behind bunching of vessels. Karachi port, which is the leading seaport in country with handling 60 per cent of international trade of the country, is lacking facilities required for modern port operations and needs immediate renovations especially as far as dry bulk cargo handling is concerned. The port can be good for containerised operations, and yet it has to transfer its load of dry bulk cargo handling to Port Qasim, which is in the radar of private local and foreign investors for its relatively attractive newness when compared to KPT.

KPT is senescing. The productivity of loading and unloading of cargo there is fast declining and thus creating bunching of vessels. Notably, minimum load rate that comes under the definition of efficient productivity is 2,000 tons per shift or 4,000 tons per day as per the rules of KPT. But, due to slow loading/unloading rate, bunching of vessels is unavoidable, which are marring the performance of ships and unleashing ripple effects to the detriment of trade performance. A fact, recently, was deplored clearly in a letter sent by Mohammad A. Rajpar, chairman Pakistan Ship's Agents Association (PSAA) to the chairperson KPT, Nasreen Haque. The undersigned said the berths were overcrowded by vessels partially or yet to be loaded with exporting wheat. The government has given priority to the exports of wheat because of the bumper crop this season and excessive carryover stocks of the last year. Chairman PSAA expressed his dissatisfaction over the inapt loading and unloading at the port. Although, the letter seemed having no intent to fire curt at the lethargic performance, the chairman PSAA brought in to the notice of KPT's chairperson an important issue that may have negative implications on the export sector and thus foreign exchange as well as raised question over the operational efficacy of KPT.

Wheat exports can scale up exports revenue for Pakistan. The ministry of ports and shipping should take corrective measures to ensure uninterrupted exports and imports of commodities to and from the country. Wheat cargoes should be cleared at faster pace or at least at par with the set standards, for that matter. In view of forecast of bumper wheat crop and old stocks, the government can earn much-needed foreign exchange, but greed, be it on the part of government departments or exporters, may deprive the economy of valuable revenue. The country is short of modern warehouses to keep the quality of wheat intact and inclement climate can dampen the hopes of high profits. It is advisable that the ministry thinks seriously on the line of shifting dry bulk cargo operations entirely to the Port Qasim to accelerate port operations for the betterment of national shipping and ports industry and for the economy. The improvement in port efficiency will increase the Pakistan's market share in seaborne trade of Arabian Sea.