Chaos in Kandla after ban: 4,000 wheat trucks in queue, 4 ships half-full

The snap announcement of the ban on wheat exports has led to chaos at the Deendayal port in Gujarat’s Kutch district, with exporters and traders unsure of the fate of their cargo.

According to officials, close to 4 lakh metric tonnes (MT) of wheat stranded outside the port belong to merchants from Madhya Pradesh alone — some still in trucks, some in godowns already overflowing with wheat. Among the held-up cargo is 60,000 MT of wheat to Egypt — the first ever consignment that was to leave the port after the Ukraine-Russia conflict began.

Last Friday, a day before the ban was announced, the port was humming with loading activity.

Officials from Egypt’s Central Administration of Plant Quarantine were there to oversee the shipment. And a delegation from Madhya Pradesh had reached Gandhidham town near the port to flag off a cereal consignment to Egypt the next evening.

On Monday, Sanjay Mehta, chairman, Deendayal Port Trust, told The Indian Express: “There was already a lot of wheat inside the port. After the ban was imposed, trucks carrying wheat are in line outside. Many representations have come to us in this regard. Within the port, there is over 1 lakh MT of wheat.”

The port receives wheat from Punjab, UP and MP for export mainly to the middle-east and European countries. “There are over 32 large godowns within the port. Many of them are full with wheat consignments. The rentals of godown or storage charges imposed at the port have also shot up — from Rs 10 per day per tonne to Rs 25. There is no space and wheat is now lying in the open,” said an official at the facility, formerly known as the Kandla port.

The transport business is also in disarray.

“It seems like there was no planning before the Government came up with the notification prohibiting wheat export. Transporters give truck drivers and cleaners allowances and money for fuel estimating the transportation time. But thousands of drivers and cleaners are stuck as cargo from their trucks are not being offloaded. Vessels are berthed at the port but Customs is not allowing loading,” said Teja Kangad, president, Gandhidham Chamber of Commerce and Industry.

“About 4,000 trucks carrying 3.75 lakh MT of wheat left for Kandla before the Government imposed the ban. These trucks have been stranded for the last 7-8 days, unable to unload. Apart from this, we had sent some wheat earlier, which is lying in godowns near the port. These are consignments belonging to small traders in Madhya Pradesh,” said Gopal Das Agarwal, president, Indore-based Sakal Anaj Dalhan-Tilhan Vyapari Mahasangh Samiti, an association of grain merchants in MP.

According to Deendayal Port Authority (DPA) officials, 44,340 MT of wheat sourced from MP has already been loaded on the Liberian-flagged vessel Mana, which was to set sail for Egypt on May 16.

“We are pleading with the authorities to allow us to load at least 5,000 MT more so that the vessel achieves balance and is ready to sail. Around 500 trucks loaded with our wheat are waiting in the port to discharge their cargo on the wharf, to be loaded on the vessel. In fact, some wheat is already lying on the wharf but we are not able to load that, either,” said sources associated with the shipment.

Besides Mana, Chinese-registered Xin Yi Hai 16, Indian-flagged Jag Radha and Singapore-flagged Valiant Summer are berthed with loading operations halted. “Government offices remained closed on Sunday and on Monday on account of the Buddha Purnima. We are incurring huge additional costs due to the longer loading time and extra transportation cost,” said a DPA official.

Xin Yi Hain 16 was to set sail for Indonesia on Sunday with 55,162 MT of wheat but only 28,220 MT had been loaded till Monday evening. Jag Radha was to set sail for Bangladesh on Sunday with 44,280 MT of wheat but only 37,460 MT has been loaded. Valiant Summer is scheduled to set sail on Wednesday with 63,000 MT of wheat but only 12,800 MT has been loaded.

“Five more vessels are waiting in outer anchorage for their turn to berth and load wheat consignment,” the DPA official said.

The Government has allowed shipments for which irrevocable Letters of Credit (LC) had been issued before the ban was notified on Saturday as well as consignments requested by governments of other nations for ensuring food security.

However, sources involved in the 6,000 MT consignment to Egypt said even the exemptions listed by the Government are not being honoured.

“The Customs ordered the stopping of loading while directing us to file all the export documents for the consignment afresh. This despite us having the irrevocable letter of credit (LC) for the consignment,” a source linked to the shipment told The Indian Express.

Representatives of Mera International India Ltd, which sourced the consignment, could not be reached for comment. T S Ravi, Customs commissioner at the port said: “The latest guidelines mandate that for exporting a shipment of wheat, an exporter is required to obtain permission from the DGFT (Director General of Foreign Trade) by submitting the irrevocable LC.”

Those associated with wheat exports also say that irrevocable LCs are usually issued after shipping bills are filed from the port of origin. “Therefore, there is a big question mark over the supply contracts signed by Indian wheat exporters. Besides suffering financial losses, they can face litigation,” said an industry insider.