New Delhi: Palm and soy oil laden ships are backing up at Kandla Port in Gujarat, people familiar with the matter said on Thursday, threatening to add at least $10 a tonne to import prices for Diwali next month, when festive fried food demand soars.

Kandla Port has shut one of the four jetties since 1 July to at least the end of this year for maintenance and dredging to deepen the draft to 13 metres, a person at the port familiar with the matter said.

“There is a backlog of 15-16 days in discharging a vessel as this is the peak season for edible imports," the person said. India’s edible oil imports rise sharply during the festival season from August to October.

Traders said as many as 10 vessels with 169,000 tonnes of edible oils have been stranded at Kandla from as far back as 3 September.

Eight vessels carrying 138,000 tonnes of palm oil are waiting to berth, while two vessels containing 31,000 tonnes of soft oils such as soyoil and canola are also waiting.

Last month’s record imports also added to the congestion at the port. India, the world’s top vegetable oil buyer, shipped in a record 1.3 million tonnes in August.

Supplies at Kandla, which takes palm oil shipments from Southeast Asia and soyoil cargoes from Latin America, go into the northern India market.

“The latest congestion is peculiar to the Kandla port and no similar problem exists elsewhere," said B.V. Mehta, executive director of the Extractors’ Association of India.

The port authorities will shut Jetty 2 for raising the draft after completing the job at Jetty 1, said the person at Kandla port.

Traders said the situation could worsen with the expected arrivals of around 92,000 tonnes by Tuesday, including 59,000 tonnes of palm oil.

Delays of a fortnight in vessel discharges would push up the cost of edible oil imports by $10-15 a tonne, they said.

At Kandla, imported crude palm oil quoted around $720 a tonne, canola oil at $870 and crude soyoil at $875 on Thursday, traders said.

The delay in vessel discharge would also double the tank storage cost by around $8 a tonne for a month, a Mumbai-based trader said.

To ease congestion, Kandla is also using the jetties of state-run fertiliser producer Iffco Ltd and Indian Oil Corp. Ltd, the person at the port said.

“The port will allow only those vessels to berth that will be providing two lines giving minimum discharge or loading rate of 300 metres per hour," a separate shipping source said, citing details of end-August meeting by the port traffic manager.

“Otherwise the vessel will be shifted to outer anchorage without any hesitation," he added. Reuters

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