Sponge iron cargo shipped from India to Bangladesh via river *corrected

An Indian exporter recently dispatched the first sponge iron cargo from India to Bangladesh for this year via the river route to bypass congestion on the land border between the two countries.

Kolkata-based Bunty Overseas has shipped a 1,100 t sponge iron cargo from Kolkata to Narayanganj in Bangladesh via the river route, as coronavirus control measures have slowed truck movement between the two countries at the Petrapole checkpost in West Bengal.

Tata International had previously shipped cargoes of sponge iron via the river route to Bangladesh in 2018.*

"The shipment has not yet reached Narayanganj which it is likely to do in another three days. We are waiting to see how smoothly the consignment is customs-cleared in Bangladesh and transported to various mills before taking a call on the river route being a sustainable one," said Bunty Overseas director Bunty Agarwal.

The shipment cost from Kolkata jetty to Narayanganj works out higher for the Indian exporter than road transport but it will be cheaper for steel mills in Bangladesh to transport the shipment from Narayanganj to their mills. Ultimately, the landed cost of sponge iron at a Bangladesh mill shipped via the river may be at par or even lower than shipping through road, said Agarwal.

"We are hopeful of sending another 1,000-1,500t shipment via the river in mid-July," said Agarwal.

Bangladesh imported 440,000t of sponge iron from India in FY 2019-20. Road transport of cargoes is preferred by mills around capital city Dhaka while Chittagong-based mills import via the sea route.

"We welcome the new river route for transporting sponge iron, it's good to have that option. My view is this may be more viable for the 20-25 smaller mills around Dhaka and not so much for Chittagong-based mills," said Sanjoy Ghosh, senior supply chain manager for BRSM, a large Chittagong-based mill. The mill imports around 15,000t sponge iron/month from India, mostly through the Chittagong port.

Easing of restrictions has led to smoother movement of trucks through Petrapole while congestion at Chittagong port has eased too, said Ghosh. However, a shortage of containers at Kolkata port is hampering shipment of sponge iron ore to Chittagong.

*Correction- A version of the story published on 1 July had omitted mentioning the fact that the river cargo dispatched by Bunty Overseas was the first shipment by this route in 2020 and not the first ever shipment sent via river. Tata International had previously used the river route in 2018. The headline, paragraph 1 and 3 reflect the changes made to the story.