Egypt trade ministry rejects price increase

Egypt trade ministry rejects price increase
Published: 25 January 2010

The Egyptian government has rejected an attempt by the cement industry to raise prices based on sustained high demand, according to news reports.

The Ministry of Trade and Industry issued a "warning," according to ministry official Hesham Ragab, against potential increases.

Rising prices have elicited complaints from the public in the past. In addition, efforts to maintain Egypt’s position as a competitive cement producer likely prompted authorities to keep the price low, explained Ismail Sadek, head of construction and building material research at investment bank Beltone Financial.

In addition, as one of Egypt’s most profitable industries, fluctuations in cement price can affect the entire economy.

"Given the profitability of the cement industry, the government intervenes [in preventing price increases] in order to prevent increased inflation," Sadek said.

"Certainly this [price freeze] will have a negative impact on the cement industry and on the investment flows in the industry," he went on, but with demand remaining strong the industry doesn’t have much cause for complaint.