KARACHI, Aug 22: Cement export prices to Afghanistan have registered phenomenal increase of 43 per cent or by $15 per ton, from $35 to $50 per ton (ex-factory), industry sources said on Monday.

Exports to the other major destination Iraq is also fetching almost equally higher price of $55—60 per ton compared to $40 per ton (fob). Market watchers contend that major price escalation has come in the last couple of weeks.

Exports of cement in the previous fiscal year ended June 30, 2005 stood at 1.6 million tons, representing growth of 40 per cent over the earlier year (2004). “Cement producers are closely looking towards foreign markets because exports have become more profitable than local sales”, says an industry analyst.

The abnormally huge demand, which presently surpasses the supply, has also shot up prices in the local market, which manufacturers and retailers, blame on each other. And the government has been persuading producers to lower the price to Rs260 per bag, which currently is selling at Rs280 to Rs290 per bag, depending on the location and brand of the commodity.

The government has also asked producers to speed up the process of bringing additional capacity on line, so as to narrow down the current demand/supply gap. Expansions are underway across the sector and according to one producer, 4 to 5 million tons of cement could reach the market later this year or early next year as expansions begin to come on stream.