KARACHI: The export price of cement to Afghanistan one of the largest export markets for the country has risen to $50 per ton.
A cement producer, who asked not to be named, said that the export price had jumped from $38 per ton, four months ago. He said that in the last 15 to 20 days, the price had increased by $5 per ton.
Explaining the reason for the rise, the industry source said that it was to fill the gap of wide difference between the local inland prices and those prevailing in Afghanistan.
He observed that unscrupulous elements were diverting the exports destined for Afghanistan to the higher-priced local markets.
Excise duty and sales tax of Rs100 is charged on a 50-kg cement bag.
“As exportable cement to the neighbouring war-torn country is excise and sales tax free, it looks profitable to divert it to local markets, unless the prices in Afghanistan and local markets were at par,” he said.
He did not see any unfair play in the practice saying that higher export prices meant earning more foreign exchange for the country.
The industry source said that cement prices were increased by the producers in the local markets in southern region of the country and the prices could be raised in the Northern zone by Rs3 to Rs5 per 50-kg bag in the next few days. “It is all to cover the rising costs,” he said.
Aizaz Mansoor Sheikh, Chairman All Pakistan Cement Manufacturers’ Association (Apcma) and CEO at Kohat Cement Limited, who holds the view that ‘excise duty is an incentive to steal’, conceded that the export price to Afghanistan now stood at $50 per ton.
But he refuted the belief that the industry was making enormous profit by dispatches to Afghanistan. Mr Mansoor asserted that the industry was able to eke out only $5 a ton from the exports to the neighbouring country.
“The transaction is a total loss and has been saved only due to government’s incentives of duty and financing facility,” he said.
He stressed that the Apcma had long since called upon the government to monitor the cement bags destined for Afghanistan, to prevent their diversion to local markets.