Local producers warn of Saudi black market

Local producers warn of Saudi black market
Published: 27 June 2011

Western and southern regions of Saudi Arabia are witnessing sharp rises in bagged cement prices and the emergence of a black market, Saudi-based Al Riyadh daily reports Saturday, citing local cement producers.

The imbalance between supply and demand is likely to continue in some areas due to the fact that a number of cement producers have very low inventories, the paper quotes Ahmad Zugail, chief executive of Najran Cement Co, as saying.

Zamil Al Mokrin, general manager of Eastern Province Cement Co, who expects total cement demand this year to reach 50Mt, attributed the rising prices to a shortage in fuel supplies at some cement companies, and growing demand due to new residential and governmental projects, Al Riyadh reports.

Moreover, the rush of consumers to overbuy quantities beyond their needs raised demand further and prompted some distributors to exploit the situation and hike prices and create a black market, Mokrin said, according to the newspaper.