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Coronavirus pandemic | Some Indian ports declare force majeure, could delay crude discharge: Sources

The federal shipping ministry has issued a letter allowing ports to use the COVID-19 pandemic as valid grounds to declare force majeure clause, according to a notification seen by Reuters.

March 25, 2020 / 04:01 PM IST
 
 
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Some ports in India including those owned by Adani Ports & SEZ Ltd have declared force majeure after Asia’s third-biggest economy announced a 21-day lockdown to prevent the spread of the coronavirus, documents seen by Reuters showed.

The federal shipping ministry has issued a letter allowing ports to use the COVID-19 pandemic as valid grounds to declare force majeure clause, according to a separate shipping ministry order also seen by Reuters.

“All our ports are operating. Force majeure is for ensuring that wherever APSEZ has commercial contracts, the time taken for handling and delivery of cargo doesn’t apply,” APSEZ said in a statement.

India’s shipping ministry could not be immediately reached for comment.

The force majeure declaration could delay discharge of crude oil tankers, an Indian refining source told Reuters.

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“Though FM is declared, some operations are continuing. Ports will not be responsible for any delay and any other thing as per the notification of Adani,” said the source.

Port services are categorised as essential so ports are remaining open with minimal operations, the source said.

Ashok Sharma, managing director of shipbroker BRS Baxi in Singapore, said the lockdown would impact oil demand but not really imports at this stage.

“Indian (crude) imports are by and large term contracts and what may be impacted are the speculative spot lifting. Also, 21 days is a relatively short period of time, but if it is extended beyond this period and if the (coronavirus) really bites then we would see a slowing down (in crude imports) for sure,” he said.

No government-owned ports have declared a force majeure as yet, although they have been given the liberty to do so, Sharma also said.

Besides APSEZ, Reuters has also seen letters from Krishnapatnam Port, Gopalpur Port, Karaikal Port and Gangavaram Port declaring force majeure on loading and unloading delays.

Calls to these ports seeking comment went unanswered.
Reuters
first published: Mar 25, 2020 12:05 pm

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