Cement exports from Pakistan to Afghanistan touched 190,000t mark in July despite withdrawal of rebate for stabilising prices in the local market, official sources told Business Recorder.
Sources said the All Pakistan Cement Manufacturers Association (APCMA) had raised serious concern over the withdrawal of rebate a few months ago, arguing that Pakistan would lose its hard-won export market in Afghanistan to India or Central Asian republics, but the current export trend negates their apprehensions.
They said the Industries and Production Ministry briefed the Economic Co-ordination Committee (ECC) of the Cabinet on Wednesday that the cement manufacturers once again have started capacity under-utilisation from July to stop further decline in prices.
The average capacity utilisation of cement plants during the fiscal year 2005-06 remained around 84 per cent due to government pressure especially from March, but in July it was recorded at 77.3 percent, the sources added. At present, the import of cement is allowed at zero percent customs duty and withholding tax from all countries, including India.
Sources said the private sector was very active when the government announced duty-free import of cement, but it materialised 76,879t cement so far against the expected quantity of 217,824t for which letters of credit (L/Cs) have been opened.
They said the ECC was also informed that the retail price of locally-manufactured cement of different brands in major cities has dropped to Rs 265-300 per bag except Quetta where the rate is static at Rs 335. The international price (FOB) of cement is $38-44 per ton.
The ministry has also submitted a month-wise price comparison to the ECC, according to which in January 2006, prices registered 15.6 percent increase against the same month last year, February 15.5 percent, March 27.5 percent, April 38 percent, May 22.9 percent, June 9 percent and July slightly above 4 percent, the sources added.
They said in May last, the APCMA was of the view that by September there would be a glut in the market, but it also proved unfounded as there is no such situation and the cement manufacturers are earning a reasonable profit.
The ministry has apprised the ECC that there is adequate supply of cement and its prices in the country are stable, the sources said, adding the ECC expressed its satisfaction over the prevailing price situation.