Four ships waiting to dock at Kandla port to load wheat for export

Four transport vessels are still stuck at Kandla port until Tuesday, waiting for berths to load wheat which was cleared for export more than 10 days ago, traders said.

Of these, trade sources said each had a carrying capacity of 30,000 to 65,000 tonnes of wheat (see chart). Until a few days ago, eight ships were waiting to dock despite all the authorizations. But in the past few days, four shipments have been cleared by authorities, traders added.

All of these shipments had passed customs requirements by May 13 and were accompanied by valid shipping invoices and letters of credit (L/cs), traders said.

That aside, an additional 1.5 to 1.6 million tonnes of wheat sits in ports because they don’t have valid letters of credit or haven’t been paid in advance.

This makes a total of nearly 2 million tonnes of wheat lying in Indian ports awaiting export clearance.

“These transport vessels, which have all the authorizations in place, were not allowed to dock as authorities request additional documentation after the ban came into effect, causing demurrage losses to exporters and shippers” , said a senior official of a world trade. company told Business Standard.

He said that on average since May 13, exporters have been paying around $25,000 to $40,000 per day per ship for demurrage, which is a considerable amount.

“As per the Foreign Trade Policy and Procedures Manual which guides all Indian export engagements, goods in transit which have been entered as part of their exports and which have all valid documents in place will need to be cleared to be shipped. So if an exporter has valid shipping invoices before May 13 and all other documents and clearances are in place, they should be allowed to fulfill their obligation,” a senior Indian official told Business Standard. Trade Association (ITA), an association of commodity traders. .

The traders said that several major Indian export and grain trading houses had already invoked the force majeure clause, thus nullifying their export commitment made with local traders.

In international trade, the invocation of a force majeure clause avoids the exporters legal proceedings on the part of the buyer and guarantees that the latter will not sue the seller in arbitration for non-delivery.

The force majeure clause comes into effect within seven days of the unforeseen event which, in this case, was May 13, the date on which wheat exports were banned.

However, the invocation of this clause does not guarantee that demurrage and other debts will not be paid by the exporter.

Meanwhile, the General Directorate of Foreign Trade (DGFT) in a notification issued on Monday said it would not authorize the export of wheat when irrevocable letters of credit (LC) were issued after May 13 (date export ban).

The notification was issued after it was noticed that some fraudulent backdated LCs showing the date of issue on or before May 13 were submitted by unscrupulous exporters for the issuance of Certificates of Registration (RC). But, according to the date of exchange of LC messages between Indian and foreign banks and the Swift message, it was done after May 13, according to an official statement.

Trade sources reported that out of total export orders of about 4.2 million tons of wheat, LCs of almost 5.5 million tons were submitted to the government for registration after the ban, the pushing to become aware of the fraud.

Ships waiting to dock to carry Indian wheat
port name Vessel name Quantity (in tons) Destination
kandla Viet Thuan 30,000 Sri Lanka
kandla Baltic wasp 60,500 Bangladesh
kandla Stratton 65,000 Indonesia
Tuna* paro 38,500 Nigeria
* Tuna is thrown in the port of Kandla

NOTE: Traders claimed that all shipments had all clearances in place by May 13.

Source: Traders and exporters

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