KARACHI: With a fresh increase of up to 15 rupees per 50kg cement bag on Thursday, the commodity price has shot up to an all time high and being sold above Rs400 a bag in retail, dealers said.
“The cement price has shot to an all time high of more than Rs400 a bag,” confirmed Walibhai Patel, a cement dealer in Karachi.
He added that cement manufacturers were supplying the commodity bag at around Rs390 to dealers, while dealers were selling it above Rs400 a bag after adding their margin of profit.
The demand for the cement has declined owing to its rising prices, Patel said.
Furqan Punjani, an analyst at Topline Securities, said that the manufactures were having multiple reasons to push the prices up.
First of all, the doubling of coal price to $140 a ton in international markets from $70-80 a few months ago compelled manufactures to pass on the pressure of price to the end consumers, he said, “The cost of coal in the manufacturing of cement stands at 80 percent.”
Secondly, making comparison of current commodity price with a year old one prices would defiantly give a big difference, as world was passing through economic recession till last year and price of everything were down. While, the prices of every commodity, including cement, were up, as the spell of recession was over now.
According to a dealer, the price of cement was standing somewhere around at Rs330 in last December.
Analysing reasons for the increase in cement price at present, Punjani further said that April to July was a period in which construction activities went up every year as this was the last quarter of fiscal year in which government released development funds to avoid lapse of them. In addition to this, the reconstruction work in flood-hit areas was also about to being in the quarter this year.
“Keeping all these reasons in view, the cement manufactures were consistently increasing the commodity price in advance,” he said, adding that the increase in price was must as most of cement manufactures were running in losses at present.
A former director on Pioneer Cement’s board agreed that the increase in cement price was must as their cost of doing business has increased manifold over the period. He however, said on the condition of anonymity that cement manufactures have formed a cartel again and were raising the commodity price as per an agreement.
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