The price of cement in Saudi Arabia continues to rise unchecked as demand pushes up against supply limits. The price of a bag of cement in Jeddah has increased from around SR11 to SR18 per bag over the last month. In just one day — Monday — the price rose again to SR19, reflecting a rising desperation amongst construction firms for supplies. In Gonfotha, the price of one bag of cement reached SR25 per bag. Many construction businessmen complained about the high price saying that SR25 per bag is too high. Others stopped their building activities for lack of supplies.
Abdullah Al-Gonfothi, a businessman heavily involved in construction, said that big players in the industry have bought up all available supplies and are profiteering by reselling into the market, forcing prices up to as much as SR29 per bag. Hussein Al-Harbi, building supplies retailer, told Arab News that his company is buying in cement for SR17.50 a bag and selling it for SR18 per bag. He said that many people are buying cement these days and that they are making large profits.
Khaled Al-Mutairi, construction businessman, said that the increase in price caused huge damage to his business, as contracts he made assumed a much lower cost for cement. “The contract we signed with customers was based on the old cement price. Now when we buy it at the current high price, we suffer. We are already facing problems between clients and us because of the high prices.”
The general manager of Yanbu Cement Company, Dr. Saud Islam, said that the main reason for the current price surge is due to increase in demand and short in supply. He said that the Yanbu Cement Company is producing cement for the price of SR10.5 per bag. He blames businessmen and transport costs for the increase in price. He said that the company intends to increase production by 1 million tons per year to ease the supply shortage and reduce the pressure on the construction industry.