The economic slowdown, higher depreciation of trading partners’ currency and regional capacity additions exerted downward pressure on country’s cement exports.
Industry experts said that the fiscal year 2012-13 would remain muted on cement exports front, as the overall exports plunged by 9.2 per cent YoY to 0.76 million tons while on a monthly basis, the same improved marginally by 3.3 per cent. It is being expected that FY13 would stay muted on exports front because exports to Afghanistan (55 per cent of overall exports) will remain flattish owing to lack of construction activity as most parts of the country remain affected by armed conflicts.
Relatively lower cement prices in India, main obstacle to Pakistani exports, are expected to remain upward sticky owing to recent regulatory pressure and the onset of monsoon season; thus further pressuring exports to India. Likewise, the sea exports will continue to falter with Sri Lanka and East African region providing nominal respite.
According to experts, cement is one of the major commodities that is abundantly available in Pakistan and can be exported to India through land route. Despite tall claims to increase bilateral trade, the respective governments failed to remove non-tariff barriers imposed on Pakistani products.
The Most Favoured Nation (MFN) status to India is not giving boost to Pakistan’s cement exports to the neighbouring country mainly due to the Pak-specific non-tariff barriers, experts said. They regretted that despite rhetoric to promote trade with Pakistan, the Indians have not yet removed NTBs that impede exports from Pakistan. The cement sector representatives said that though there is high demand for Pakistani cement in India, where cement is around 16 per cent costlier as compared to Pakistan, the exports have constantly declined. Moreover, multiplicity of Indian standards, rules, regulations and enforcement agencies create confusion and hurdles in smooth trade. Likewise, the absence of testing facilities at border causes undue delays, they added.
They said that Pakistan, with a vast potential to meet India’s cement demand of construction sector, is unlikely to enhance its exports manifold to the neighbouring country in presence of NTBs. They believe that India is a place where manufacturers can offload huge surplus production of the commodity as their supplies are restricted against productions, they said.
The Pakistani exporters have demanded of the government to look into the matter, urging that exporters should also be provided all necessary facilities at the border points so that they could easily clear their consignments.
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