KOLKATA (miningweekly.com) – Indian thermal coal imports were expected to spike over the next few months, exceeding the 200-million-ton forecast for the current financial year, a senior government official has said.

Indian thermal coal import projections for 2015/16 have already been increased to 200-million tons, but shipments could well increase by between 15% and 20%, should rainfall be insufficient during the monsoon season.

Any tardy progress of the monsoon rains carried the risk of lower hydro-electricity generation and would put pressure on thermal power generation. At the same time, scanty rainfall would trigger a rise in demand for irrigation, which would increase electricity demand.

According to the Indian Meteorological Department (IMD), the monsoon officially arrived in the subcontinent on June 5 and so far, progress across the peninsula region of the country had been “sluggish”. In its updated monsoon forecast earlier this month, the IMD revised its estimate cumulative rainfall during the season to 88% of the long-term average, down from 93% predicted before the onset of the rainy season.

According to data sourced from government agencies, Indian electricity generation during April 2015 was down 1% compared to yearly growth of 8.4% during 2014/15.

The data showed that current coal stocks available at the 100 major thermal power plants in the country were estimated at 20 days consumption of fuel, which was an improvement of about 11 days consumption from around the same time last year. Pithead stocks of major supplier Coal India Limited were pegged at around 40-million tons.

However, even if coal imports were poised for a seasonal surge, there was a logistical logjam with stocks at various ports rising to 16-million tons.

Several officials with thermal power companies said that with the Indian rupee depreciating below Rs64 to the US dollar, power companies were reluctant to blend more expensive imported coal with local fuel as it would increase the cost of power generation, which they would not be able to pass on to consumers.

The spurt in coal imports would also necessitate clearing of infrastructure and logistical logjams to negate risks of high port stocks and shortages at thermal plant sites.

According to a Coal Ministry official, besides supply side issues, the government was also having to assess the rise in import bill despite soft international prices of thermal coal, since the depreciating Indian rupee would sharply increase the total import bill.

India’s coal import bill in 2013/14 was $14-billion, which increased to $16-billion in 2014/15. According to some private analysts, coal imports could escalate to about $22-billion owing to local currency depreciation even if current international thermal coal persists at lower levels.