All Pakistan Cement Manufacturers’ Association (APCMA) said today that exports of cement to its land-locked neighbour Afghanistan are likely to suffer due to an increase in transit fees.
The Afghan government has reportedly increased the transit fee at the Torkham border by 100 per cent for each truck that carries cement from Pakistan - effective from two weeksago. Afghanistan is the biggest importer of cement from Pakistan and any change in policy from any side will cause disturbance in export despatches, APCMA officials pointed out.
Exports of cement to Afghanistan are already under duress due to the long winter and below average prices. This latest development will further undermine the margin of exporters, according to the APCMA. The Afghan government had earlier been charging PKR 9,000/- ($105.88) transit fee on a truck, which has now been doubled to PKR18,000.
To resolve the issue, an important meeting of Afghanistan’s cement importers, dealers, transporters and Afghanistan Government officials is expected to be held next week in Kabul. Some Pakistani officials and stake holders may also join the talks.
The APCMA said Pakistan presently exports cement to Afghanistan at an average price of US$38 to US$40 per ton, against international average price of US$60. All leading exporters Lucky Cement, Askari Cement, Bestway Cement, Charat Cement, DG Khan Cement, Facto Cement, Kohat Cement and others are exporting cement to Afghanistan.
Meanwhile on a more positive note, Invest & Finance Securities Ltd, a Karachi-based brokerage house, said in its current report that despite the commencement of the winter season the recent rising cement price trend has already brought 23% YoY price increase in 2QFY11. This season usually elicits a fall in cement demand, yet cement prices were raised in comparison to 1QFY11, showing an improvement of 6% and 4% Q/Q to date in the north and south zones, respectively. With the cement manufacturers’ north zone cartel back in action, cement prices in the north are expected to surge by approximately PKR5/bag in the coming week.