ISLAMABAD, Aug 10: The government has once again asked the cement manufacturers to lower the prices of cement otherwise it would be constrained to impose a regulatory duty on its export.

Officials told Dawn that the government was in touch with the cement manufacturers and had told them that the prices of cement were still very high (around Rs280 per bag) and they must come down to the level of June 19 (Rs259 per bag).

The manufacturers were told that the government did not believe in “knee-jerk reaction” because the industry was as important as were the consumers.

The officials said the government believed that there was no economic justification for increasing the prices of cement as it was against the stated official policy of promoting construction activities in Pakistan. Also, increased cement prices were causing high inflation, which was not in the interest of the country as well as the public at large. The price of a cement bag, which had shot up to Rs320 on June 23, had come down to Rs280 on August 6.

“But these prices are still very high and warrants government’s intervention,” a source said, adding that in case the cement manufacturers did not further reduce their prices, the government would have no option but to impose a regulatory duty on cement export. He said the government knew that the manufacturers were exporting cement to Afghanistan and some other countries. “We hope they would listen to the government to avoid any action,” he added.

Talking about sugar prices, the officials said the decision to import 200,000 tons of sugar by October would help stabilise its prices.

For another 100,000 tons of sugar, the TCP has opened a tender to have the commodity reached Pakistan by the first week of October that is also largely expected to improve the supply side, thus helping see downward trends in the prices of the commodity.

In addition to 200,000 tons sugar being imported by the TCP, the private sector has imported 300,000 tons of raw and refined sugar. Besides, the government has allowed the import of duty-free sugar from India.

“The government has been told that a private sector party has finalized a deal with India to soon import 20,000 tons of sugar,” a senior government official said.

He said that arrangements had been made to urgently import Indian sugar through the Wagha border in order to improve demand and supply situation. “Once that happens, hoarders of sugar would start releasing their stocks and prices will come down from the present average level of Rs28 per kg,” the official said. He said that traders of Narang Mandi, Lahore, and Joria Bazar, Karachi, had informed the government that sugar had started coming from India that was likely to stabilize its prices.

The official said had the government not allowed the duty-free import, sugar prices would have gone to Rs40 per kg. He said that sugar importers had been telling the government that the commodity was costing them Rs27 per kg after having it imported at the rate of $365 per ton post-Karachi, and despite that they were selling it for Rs28 per kg.

“But now with the opening of Indian route for the import of sugar, its cost would come down by $25-$30 per ton in terms of transportation and this will hopefully cut the prices of the commodity,” the official said.

He regretted that mill owners had increased the prices of sugar by Rs6 per kg on December 23, 2004 without any economic justification, and that too when the crushing season was on peak.

The official said that enquiries from the private sector were growing to import sugar and that the government was determined to contain domestic sugar prices.

Pakistan is expected to import 300,000 to 500,000 tons of sugar from India over the next few months. Most of sugar is expected to be imported from the mills in Uttar Pradesh, Punjab and Haryana, as it will be economical and reduce travel time.

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