Cement exports have been on a rollercoaster ride. According to the latest cement dispatches released by All Pakistan Cement Manufacturing Association (APCMA) the export volumes continued to face stiff competition from Iranian cement in Afghanistan and dwindling demand from India.
And with countdown to US withdrawal from Afghanistan on a roll, the export scenario is becoming even jittery; the eventual departure of NATO troops from the Afghan territory is being seen as a significant event for the cement export situation in the country.
Industry insiders and analysts are foreseeing two possible scenarios: one which is likely to dismantle exports sales from the country is where Afghanistan falls back to 1990 post civil war period. This early 2000 scenario encompasses no construction activity in the region, and thus little or no demand for cement as Afghanistan faces uncertainties. Capacity in Afghanistan itself is under a million ton; this could significantly reduce cement imports by the country.
A more comfortable scenario, at least for Pakistan, would be if Afghan government initiates recovery programme along with the international support. And, though Iranian cement will continue to hamper the export from Pakistan, the increased development activity in Afghanistan will definitely serve as a key component in the total cement exports of Pakistan; mind you, exports to Afghanistan make up around 50 percent of the total cement exports on average.
While placing a bet on one of the two scenarios is difficult, a cut in exports to Afghanistan would mainly affect the northern cement players in Pakistan not only in terms of dispatches to the neighbouring country but also because of fewer prospects in other key markets due to new surplus capacities in the same.
On the other hand, sea exports are expected to bloom as long as demand in South Africa, Sri Lanka and some parts of Middle East continue to see growth.
As far as the likelihood of the two scenarios is concerned, a wait and watch approach is what experts choose as they remain clueless which way the wind would blow.
And with countdown to US withdrawal from Afghanistan on a roll, the export scenario is becoming even jittery; the eventual departure of NATO troops from the Afghan territory is being seen as a significant event for the cement export situation in the country.
Industry insiders and analysts are foreseeing two possible scenarios: one which is likely to dismantle exports sales from the country is where Afghanistan falls back to 1990 post civil war period. This early 2000 scenario encompasses no construction activity in the region, and thus little or no demand for cement as Afghanistan faces uncertainties. Capacity in Afghanistan itself is under a million ton; this could significantly reduce cement imports by the country.
A more comfortable scenario, at least for Pakistan, would be if Afghan government initiates recovery programme along with the international support. And, though Iranian cement will continue to hamper the export from Pakistan, the increased development activity in Afghanistan will definitely serve as a key component in the total cement exports of Pakistan; mind you, exports to Afghanistan make up around 50 percent of the total cement exports on average.
While placing a bet on one of the two scenarios is difficult, a cut in exports to Afghanistan would mainly affect the northern cement players in Pakistan not only in terms of dispatches to the neighbouring country but also because of fewer prospects in other key markets due to new surplus capacities in the same.
On the other hand, sea exports are expected to bloom as long as demand in South Africa, Sri Lanka and some parts of Middle East continue to see growth.
As far as the likelihood of the two scenarios is concerned, a wait and watch approach is what experts choose as they remain clueless which way the wind would blow.
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