Three of India's most industrialised states plan to import 10.5 million tonnes of coal in coming months as officials scramble to arrest widespread power cuts, a move that could push global coal prices to new highs.
The scale of the purchases and the decision to go back on a plan to cut coal imports underscore the severity of the India's fuel crisis. Utilities' coal inventories are at the lowest pre-summer levels in at least nine years and electricity demand is seen rising at the fastest pace in at least 38 years.
The three states are the among the biggest power guzzlers in the country, cumulatively accounting for nearly a third of India's electricity demand in 2021. The move by India, the world's second largest coal importer, could lead to a further increase in global prices, which are already trading near record highs due to fears of a supply crunch following the European Commission's decision to ban coal imports from Russia after its invasion of Ukraine.
Russia is also a possible supply source, but costs are already high and buyers are likely to push for discounts, two traders said.India's federal government has also asked the state governments of Karnataka, Uttar Pradesh, Madhya Pradesh, Punjab and Haryana to import a total of 10 million tonnes of coal.
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