Pakistani cement makers have stopped exports amid strong domestic demand and rising local prices, industry officials and the government said on Wednesday. Pakistan has seen a sharp rise in cement demand in recent months as its booming economy fuels construction. This has resulted in supply shortages, and a sharp rise in domestic prices. According to data from the private All Pakistan Cement Manufactureres Association (APCMA), cement sales during March reached a record at 1.82Mt, of which 180,000t was exported, mainly to neighbouring Afghanistan.
"The cement manufacturers have voluntarily agreed to put a moratorium on all export shipments till April 30," said Jehangir Khan Tareen, the Minister for Industries and Production. This will ensure an additional supply of around 150,000t in the local market, and will ease pressure on prices," Tareen told Reuters.
In the open market, a cement bag of 40 kg is currently being sold at 360-380 rupees (US$5.98-$6.32) compared with an average ex-factory price of around 310 rupees. Tareen said the gap in cement supplies was likely to be overcome in the next four months, as more plants would be functional in this period, having enough capacity to meet the local demand."
Analysts say there was not much of a price differential between local and imported cement, which was also discouraging importers. "Theoretically, cement if imported would have a C&F value of $50-60 per tonne," said Atif Malik, analyst at brokers Jahangir Siddiqui Capital Markets. "Adding 750 rupees a tonne CED, 15 per cent GST, freight, port handling, packaging and transport charges, price comes in the range of 270-300 rupees per bag," he said. This is almost equal to the local prices which were prevailing before the recent hike in prices, he said.
"The import of duty-free clinker is also unlikely, as there aren’t enough grinding mills currently available to process imported clinker in the country as almost all of them are already running at their maximum level," said Malik.