Cement sales reported 2.8 percent year on year (YoY) growth during January 2012, indicating 2.2 percent and 4.8 percent YoY growth in domestic sales and exports respectively, industry analyst said on Tuesday.
Within domestic sales, upcountry sales grew by 1 percent as compared with 6 percent YoY growth in the south, said Shagufta Irshad Khurram analyst at KASB Research.
January remained the dullest month for exports so far with 20 percent lower sales compared with the average monthly exports during the fist half of financial year 2012, she said.
Slowdown in domestic sales can be attributed to limited public sector infrastructure spending due to tight fiscal space. Exports picked up lately on the back of improved margin outlook with increase in Afghan export prices, she said.
The slump in cement sales in January is inline with the past three years export trends where lowest monthly sales were recorded in January.
The cement sales in seven months of the financial year 2012 grew by 7.3 percent while total exports declined by 3.5 percent, where tight fiscal space limits public sector infrastructure spending despite being the last fiscal year before the elections, which are due in the financial year 2013, she said.
Increase in Afghan export prices to $50-55 per ton from the previous level of $39-45 per ton has finally attracted interest of Pakistani exporters leading to 32 percent YoY increase in January 12 and 12 percent increase for the seven month period of current fiscal, Khurram said.
Exports to India fell 8 percent in January and 48 percent for the 12 the seven month period of current fiscal, while exports to Middle East, Africa and other South Asian states via sea route went up by 4 percent in January and 19 percent the seven month period of current fiscal.
The recent hike in cement prices can only be sustained if accompanied by controlled supply, she said.
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