Growth of raw material costs lead to price rises, Azerbaijan

Growth of raw material costs lead to price rises, Azerbaijan
Published: 07 December 2007

Azerbaijan’s Ministry of Economic Development links the price increase for the construction materials in the country with two reasons – growth of worldwide prices and cost of the raw material, said the Deputy Minister of Economic Development, Mikail Jabbarov, on 5 December.  
The prices for the cement in Azerbaijan increased by 16%. Since the beginning of the year,  Garadagh Cement has been applying a new sale system. The cost of 50kg Optimal cement was defined at AZN 7.25 and 50kg Special cement – AZN 7.95.  
According to the Deputy Minister, due to the new system this year stability was observed in the market. Last year there were problems in the cement market due to the deficit of construction materials, speculations with the prices, which led to concerns amongst consumers and business people.  
The monitoring experiences held in 2007 discovered the absence of these problems. However, due to the subjective and objective reasons, sharp cement price increase was observed in all region countries ( Kazakhstan, Russia, Georgia).  
On the other hand, there are differences between the prices of the consumers and construction companies and it reads to imbalance.  
According to the Deputy Minister,  Garadagh Cement brings economic grounds for the price increase which is linked with the raise in the prime cost of the cement and raw material. “Therefore, we should pre-analyze the situation, but the reality is that during the year the prices increased for several construction materials and it also may be linked with cost of the raw material,” Jabbarov said.  
Azerbaijan’s Ministry of Economic Development considers that Azerbaijan should be capable to cover the cement demand at the expense of internal sources. However, according to Jabbarov, currently the volume of the cement produced in Azerbaijan does not cover the demand in the Country.