KARACHI, April 4: Export prices of cement to Afghanistan have jumped by an incredible 55 per cent in dollar terms in five months from around $38 per ton in November 2011 to over 58 per ton currently. In just the last one month, prices rose by $8 per ton.

A late evening report by brokerage InvestCap on Wednesday affirmed that the export price to Afghanistan had crossed $60 fob.

A cement manufacturer who asked not to be named said that Afghanistan was coming up to be the largest destination for Pakistani cement with nearly 80 per cent of the total exports heading for various cities (mainly the central and northern region) in the warn-torn country.

For the first time, at peace with itself, Afghanistan had turned from destruction to reconstruction and Pakistan, due to its proximity, had captured almost the entire market with some spill over demand met by Iran.

Analysts said that Pakistan had exported 4.7 million tons to Afghanistan during the year 2010-2011 and 2.5 million tons during the first half of 2011- 2012.

“As summer approaches and construction work starts in full swing, export dispatches are likely to further rise,” said the manufacturer.

But the cement producers’ lobby — the All Pakistan Cement Manufacturers’ Association (Apcma) — has continued to refute the belief that the industry was making enormous profit by dispatches to Afghanistan.

“The transaction is a total loss and has been saved only due to government’s incentives of duty and financing facility,” a producer of concrete had said recently.

Khurram Schehzad, head of research at InvestCap, posted a message on Wednesday evening, stating that “according to industry sources, cement volumes had gone through the room with 27 per cent growth in March over the earlier month (MoM).

The figure included local sales up by a massive 32 per cent MoM and exports by 11.2 per cent MoM.”

The official figures would possibly be released on Thursday.

In an earlier note, the analyst had stated that much ahead of the increasing cement demand during summer season, manufacturers have raised prices in the local market by average Rs200 per ton (Rs10 per bag).

“However, we reckon cement prices would further jump up by another Rs10-15 per bag on account of significant increase in the cement demand on local front during April-June period,” the analysts said, adding that during the current year FY12, cement prices have followed an upward trajectory and posted an increase of 9 per cent to financial year-to-date FYTD (July-11 to date) to Rs425 per bag.

So are the producers raking in profit? Many producers shake their heads and cry out that the increase in cost of production, fuelled by rise in power tariff due to monthly fuel adjustment and gas prices increase for captive plants was the rationale behind rise in cement prices.