LAHORE, June 20: The retail cement price in Punjab has shot up to Rs325 per bag in the recent weeks as a consequence of the shortage created in the market by an increased demand and rising exports to Afghanistan and the Gulf region. The price of a 50kg cement bag, which was available for Rs260 or so about a month back and Rs243-45 a couple of months ago, is now fluctuating between Rs300 and Rs325 in different cities, retailers say. Besides, the consumers have complained of its shortage in many parts, including the provincial capital.

Reports suggest that many consumers have either stopped work on their projects for the time being because of the increase in construction cost due to increased cement rates.

The All-Pakistan Cement Manufacturers Association (APCMA), however, says there has been a sudden and unexpected increase in the demand following the announcement of the federal budget as most users had reduced their consumption in a hope that the prices would come down. The consumers were expecting that the government would slash the excise duty on cement.

In addition, an APCMA spokesman said on Monday, the demand for public sector projects which had to complete their buying before the expiry of the outgoing financial year on June 30 has also contributed to the shortage in the market.

The APCMA says the supply of cement has also come down owing to reduction in production by some factories located in Punjab and NWFP on account of annual maintenance shutdowns and some because of the unexpected power breakdowns.

“Most factories are operating at a 100 per cent capacity in order to cover the shortages in the market. Supplies are also being made on holidays and weekly days off,” it claimed.

Another factor said to have contributed to the shortage in the market is said to be the rise in demand of cement for export to Afghanistan and the Gulf.

The APCMA hopes that the situation would change next month when the first of the new cement units becomes operational.