Azerbaijan prices to rise

Azerbaijan prices to rise
Published: 13 December 2006

The sale prices of Garadagh Cement could reportedly rise by 12- 15% in 2007. This could be caused by several factors: the expected stiffening of the existing soft prices of gas, the monopolisation of imports, and the new rearrangement of distributors and dealers.  
 
However, the retail prices of cement will be shown on the bags in 2007. This will be initially done in Baku and Absheron. The Azerbaijani Economic Development Minister, Heydar Babayev stated last Friday that the retail prices of Garadagh Cement JSC’s cement will be shown on the package from the beginning of 2007. This will be done to prevent any deliberate speculation-like increase in the prices by retail sellers. The recently observed shortage of cement in the retail market has encouraged the sellers to increase the prices by 50 -60% in comparison with those advised by the main producer of this commodity (Garadagh Cement JSC).  
 
Seven distributor entities contacting with 112 dealers in Baku and Absheron have been given an exclusive right to sell the commodity produced by Garadagh Cement in the retail market. Garadagh Cement JSC refused of distributors and closed direct contracts with trade centers and building companies in 2004. There are 702 of them in Azerbaijan and 106 in Baku and Absheron now. If this practice succeeds, it will be implemented throughout Azerbaijan, the Minister said. However, this "Soviet-type" economic experiment started by the Economic Development Ministry’s economists will hardly be accepted in countries with really market-based economic systems, because these systems are based on Demand and Supply.  
 
According to different calculations, Azerbaijan requires 2.3 to 2.7Mta of cement, depending on the scope of building work.