Pakistan cement exports decline in FY2010-11?

Pakistan cement exports decline in FY2010-11?
Published: 26 July 2011

During financial year 2010-11 (July-June) Pakistan exported 9.154Mt of cement at US$453.845m from 10.85Mt at US$484.004m in the corresponding period. This shows cement export fell by 15.65 per cent and 6.23 per cent in terms of quantity and value over corresponding period last FY 2009-10.

The average export price of cement stood at US$49.57/t compared to US$44.59/t –  reflecting a growth of 11.17 per cent YoY, according to data released by Federal Bureau of Statistics, Government of Pakistan.

A breakdown of exports showed that Afghanistan was the biggest importer of Pakistan cement during the year, acquiring 4.73Mt compared to 4.01Mt in FY29-10 –  a respectable growth of 17.74 per cent. But on a negative note, India which imported 589,206t compared to 722,967t in FY2009-10 – reflecting a fall of 18.50 per cent. Similarly, exports to other countries  also declined by 30.70 per cent to 3.910Mt from 5.64Mt in FY2009-10.
 Clinker exports also fell by 33.13 per cent to 185,896t from 277,978t in FY2009-10.

Similarly, in the month of June 2011 alone, Pakistan exported 673,400t of cement and earned US$39.249m compared to 861,50 t at US$40.440m in May 2011. This reflects a decline of 21.83 per cent and2.95 per cent in terms of quantity and value in dollar respectively on month-on-month basis.

The fall in cement exports was also noted, if compared with June 2010 data, (832,247t at US$39.253m) which shows negative growth of 19.09 per cent and 0.01 per cent in terms of quantity and value in dollar over same month last year, on Year to Year basis.

According to Invest & Finance Securities Ltd the decline in cement exports in FY2010-11 was due to a  30.70 per cent fall in exports by sea.
The report has also pointed out that cement exports faced many challenges in FY2010-11. The fiscal year starting with disastrous floods which held back cement dispatches to various export destinations. Hurdles like political strains with the neighboring country, a slump in Middle East demand and a continental cartel and dumping duty practiced in Africa pushed exports down.
With the budget approving a cut in Federal Excise Duty (FED) to PKR500/t, removal of Special Excise Duty (SED) and a decline in GST by 10 bp cement manufacturers in the north are expected to witness improved margins due to 100 per cent retention of the gain, while south players enjoying geographical advantage may pass on some portion from the relaxation, forecasts by Invest & Finance Securities.