Mumbai: Coronavirus outbreak in China is expected to have a minimal impact on the Indian ports it rates due to low China-related throughput they handle, ratings agency Moody’s Investors Service said Tuesday.
The agency, however, said the outbreak is a ‘credit negative’ for port operators in Asia Pacific.
Over 800 people have died since the outbreak last month in China. The World Health Organisation (WHO) has declared it as a global emergency.
The rating agency said the share of China-linked container cargo is less than 5 per cent by volume for the Indian ports it rates.
Additionally, manufacturers will likely seek alternative sources of supply for components to the extent that supply chain disruptions in China persist, it said.
Similarly, on the bulk handling side, Moody’s said the domestic ports it rates handle ‘negligible’ volumes linked to China and are unlikely to be impacted.
The outbreak is credit negative for Asia-Pacific’s port operators as it is disrupting domestic and global supply chains and lowering discretionary consumer spending, which will reduce the throughput growth of Asia-Pacific’s ports in 2020, the agency added.
Extended factory shutdowns in China and containment measures in Asia-Pacific countries have hit manufacturing and logistics sectors in China because of shortage of workers and manufacturing parts, creating knock-on effects for global supply chains, it explained.
It added that shipping companies like AP Moller-Maersk and CMA CGM SA recently announced blank sailings — reducing vessel calls to China — reflecting weakened output from China and low global trade activity because of the outbreak.
On the cruise shipping side, the quarantine of ships in Hong Kong and Japan will reduce the activity, it said.
Additionally, containment measures by countries will lower cruise docking at terminals and therefore the revenue derived from this business activity, it said.
(PTI)