KARACHI, July 6: Cement prices have climbed up in Karachi and other parts of Sindh, while these have reportedly fallen in the Punjab and other provinces. Dealers linked the price-hike to slow construction activities in Karachi and cities of Sindh.
The builders admitted that construction business slows down during rainy season, but it does not long last.
Dealers said that cement firms like Lucky, Falcon and Pak Land were selling a 50kg cement bag in retail for Rs250, Rs263 and Rs253, respectively, in Karachi as compared to their previous rates of Rs240, Rs255 and Rs248, respectively, a few days back.
Prior to the federal budget 2007-2008, the cement bags from these firms were priced at Rs220, Rs240 and Rs230, respectively.
President, Karachi Cement Dealers Action Committee, (KCDAC), Wali Bhai Patel, said that D.G. Khan Cement was now priced at Rs245 a bag as compared to Rs238.
“Sales are depressed due to higher prices as contractors are not lifting it,” he said.
Cement makers had increased prices ahead of the budget to counter any measure by the government to reduce prices (reduction via change in taxation structure). But the 2007-2008 budget remained silent on the cement sector.
Wali Bhai said surprisingly cement prices have fallen in the Punjab.
“We are bringing various brands of cement from the Punjab for Rs185 per 50 kg bag, and after adding Rs35 per bag as transportation charges, it comes to Rs220 per 50 kg bag,” he said.
KCDAC president said that construction boom is usually witnessed from March to early July and it slows down between July-end to the middle of August because of monsoon season.
He added that March to July had remained brisk in terms of sales, but now both private and public sector contractors have slowed down construction activities due to rising prices.
Wali Bhai further stated that some cement makers were trying to create an impression that prices have come down all over the country, but it has certainly not happened in Karachi.
“The Sindh government should investigate as to why cement is costlier in the province as compared to other provinces.”
Meanwhile, a leading cement-maker and exporter, who asked not to be named, said “cement prices in Karachi have not increased.” He, however, agreed these have come down in Punjab. As far as sales are concerned, he said it has been satisfactory despite rainy season.
Chairman, Association of Builders and Developers (Abad), Hafeezur Rehman Butt, regretted that while there was no decline in cement prices in Karachi and other parts of Sindh, these came down by Rs 10 per 50 kg bag in the Punjab.
He said because of early showers in the country, construction activities have been sluggish.
Usually construction activities dwindle in July-August monsoon season. Only filling of roof becomes slow, while finishing work inside apartments and houses continues in the rainy season, he added.
Butt said that the Monopoly Control Authority (MCA) had sent some five questions to the Abad in relation to an enquiry about the cement sector.
In response to the MCA query regarding easy availability of cement, the association replied that the price factor was totally based on whims of manufacturers. In order to manipulate prices, they either turn their direction towards exports without taking into account the domestic requirement or they simply restrict normal supply to create scarcity.
The Abad leader said the MCA had miserably failed to keep a check on prices. The cement cartel increases prices every now and then without any fear of any government agency.
To another MCA query regarding involvement of suppliers, stockists and transporters in manipulating prices, the Abad said that cement makers’ activities are the main reason of price manipulation.
The formation of cartel by cement makers had created a situation where all unethical trade practices are taking place, he added.
