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Morbi Tiles Face Collapse: Freight Costs Soar
21 Aug
Summary
- Morbi's ceramic exports fell 70% in the last quarter.
- Container freight rates have quadrupled, now costing $3,000-5,000.
- Gas and propane prices have doubled, threatening industry survival.
Morbi's vital ceramic tile industry is facing an existential threat due to escalating container freight rates and high gas and propane prices. These compounding issues have led to a drastic 70% decline in exports during the last quarter, impacting an industry that is still recovering from previous geopolitical disruptions.
The cost of shipping containers has surged from approximately $800 to $3,000-5,000, making Indian ceramic products uncompetitive against global rivals. This surge is forcing businesses to absorb wafer-thin margins or consider gradual factory closures.
Adding to the pressure, natural gas prices have nearly doubled since March 1, and propane costs have risen by 40%. The industry daily consumes millions of standard cubic meters of these fuels. This situation is compounded by anti-dumping duties imposed by several countries on Indian ceramic products.
Industry leaders are advocating for India to establish its own shipping lines to stabilize freight rates, a process estimated to take three to four years. Currently, foreign buyers are hesitant to place orders, leading to a struggling market despite domestic supply shortages.
