KARACHI, May 3: A wave of cheer swept the local cement manufacturers as Indian Commerce and Industry Minister Kamal Nath on Tuesday warned cement producers in his country of banning cement exports if prices were not brought down to “realistic levels” within a week.

“The ministry was considering a ban on cement exports to improve the domestic supply situation,” all major Indian newspapers reported on Wednesday.

In the Pakistani context, the local cement producers may be pleased with the development, but it bodes ill for consumers who have seen prices rising phenomenally in the last six months. The prices had receded only after the government imposed a ban on cement exports and allowed imports without import duty and grant of a significant freight subsidy.

But in spite of the hue and cry by producers, market sources affirm that no imported cement has yet landed in Pakistan. On the export side, the understanding reached between the government and concrete manufacturers was to cease exports from April 6 to 30 and an extension in that date has not yet been notified.

Syed Shahnawaz Nadir Shah, head of research at Noman Abid and Company, says that imports could indeed be at cheaper rates. While warning from countries like neighbouring Iran and India was real where factories were running at 100 per cent capacities, the possibility of import was remote. “In fact Iran is not exporting cement at all nowadays,” says the analyst.

Market sources affirm that Pakistan has not imported cement in commercial quantities since 1985 and thus marketing channels for imported cement are not present. Other limitations include absence of handling import of cement (or even export) in bulk quantities, at Pakistani ports. Moreover due to rising trade deficit, the government may be compelled to remove incentives given to importers, say analysts, adding that additional capacities were also in the pipeline.

Most sector analysts affirm that demand for cement was increasing at an average rate of 16 per cent per annum where reconstruction of northern Pakistan and construction of dams are yet to add to the overall demand for the commodity. But consumers of concrete ought to be worried on Tuesday’s Indian development.

The possibility of clogging of one of the nearest cement import sources (India) and the roadblocks in overall imports could again push prices higher. The government ought to think of a solution to offer relief to the consumers, before prices skyrocket again.