Stakeholders of the construction industry can anticipate a drop in the price of cement due to the recent decision of the Council for Trade and Economic Development (COTED) to suspend the tariff on imported cement for two years.
Trade Co-ordinator Dr. Clarence Henry, who presented the proposal on behalf of Antigua and the OECS in Barbados, stopped short of giving a firm commitment to this possibility but suggested that the indicators could lead to a decrease in the chronically fluctuating price of cement.
“You know when it comes to these affairs, sometimes it’s supply and demand which drives up or drives down the price of the commodity,” Henry said.
“Now, as long as stakeholders who normally are involved in the procurement of cement go out and they are able to attain and bring in the cement, it depends on availability and the quantity of the product on the market. You may find that it may result in a very competitive situation, which will be definitely to the advantage of the consumer.”
The price of cement has fluctuated greatly in the last year. Last year, a bag of cement priced at $14.50, rose as high as $19 and $22 this year, and should now be retailed at $16.50 due to government intervention. The Antigua Sun had also previously reported that there was talk of an increase to $25 per bag.
Regarding the suspension, Secretary of the Antigua & Barbuda Contractor’s Association Nicholas Hadeed said anything that brought down the cost of cement was favourable. He is also of the belief that the suspension could mean lower prices, since the withdrawal of the tariff makes way for more competitive prices.
Hadeed also cautioned it could also mean that prices might not drop, but should at least see to the prices staying at what they currently are.
Paul Smith of Caribbean Concrete Ltd. opined though that he felt sure the price had to fall, because if the duty falls, then the price should as well and if it does not, there should be an outcry by the consumers.
Smith, meantime, saw the suspension as positive. He, however, placed greater importance on the need for constant and regular supply of cement and sand, which has been a affecting the productivity of the construction sector for sometime now.
Hadeed also pointed out the construction industry was experiencing shortages in other raw materials such as steel and aggregates. He said the shortages in sand and aggregates was a local problem, but the steel and cement shortages are a worldwide problem and the suspension of the tariff might not necessarily mean that cement would be easily sourced.
“Cement is a commodity controlled by a few large corporations,” said Hadeed. Unlike foodstuffs, cars, or electronics, he said that those corporations might not find it beneficial to service markets as small as the member states of the OECS.
With the permission to procure cement from international sources without taxation, Henry speculated about the possible sources of cement.
“We believe that it may be able to be sourced from Mexico, Venezuela, possibly Santo Domingo or indeed China.”