May 31, 2006	Wednesday	Jumadi-ul-Awwal 3, 1427

KARACHI, May 30: A ship from China — Uthai Navee — carrying 530,000 cement bags of 50kg each is expected to reach the Karachi Port in the first week of next month. The vessel left the Chinese port of Qingdao on May 20, with a load of around 26,000 tons of packed cement. About a week back a vessel — S Kala — carrying 26,500 tons of lose cement made a debut of the Chinese commodity in the local market.

Two other ships carrying 25,000 tons each are likely to leave the Chinese port on Monday and would take around 10 to 12 days to reach Karachi.

“Importers, however, are apprehensive of the current market situation where the local manufacturers have started to manipulate cement prices to discourage imports,” observed president Pakistan Commodity Importers Association (PCIA) Raees Ashraf Tarmohammad.

He further said that the PCIA members were presently observing the price trend in order to avoid losses in case cement prices are further brought down by the local manufacturers. “We will place new orders after assessing the market trend,” he added.

Though importers intend to sell their stocks at a minimal margin but they cannot be expected to sell at a price that does not cover their cost, Mr Raees said adding that when imports were allowed the cement price in local market was around Rs400 per 50kg bag but now it has come down to around Rs300 per bag.

The PCIA chief appreciated the government move to lift the entire imported cement in case prices crash in domestic market and use the same for the re-construction of the earthquake areas.

He alleged that immediately after the government allowed import of cement with Rs60 per bag as freight subsidy the local manufacturers used all sort of pressure tactics which caused delays in opening of L/Cs. Even rumours were spread by the cement manufacturers’ cartel about the quality of the imported cement, he added.

He said that the first ship, which carried bulk cement, was booked at $72 per ton C&F Karachi and now it was being imported at $65 per ton. However, the first ship was booked by the builders.

Even after allowing Rs60 in freight subsidy, he said, the government would be earning around Rs14 per bag of cement from 15 per cent sales tax at customs stage and Rs38 per bag as federal excise duty (FED).

Meanwhile, the government is firm on its decision to bring down cement prices below Rs300 per bag. The government took note of the sudden hike in cement prices as there had been no apparent reason for such a spurt in prices.

“There was neither rise in input cost, nor there had been any rise in cement prices globally, hence the local manufacturers had no justification, whatsoever, for such a hike in prices,” a government official said.