Indian prices continue to rise

Indian prices continue to rise
Published: 02 April 2004

On average, Indian cement prices continue to escalate and are likely to touch Rs 175 a bag, causing concern in the construction industry. Industry sources said this was a sharp increase from Rs 95 per bag prices of last December. Prices have already touched Rs165 per bag in end-February. All the major cement companies including ACC, Gujarat Ambuja and L&T cement are likely to hike prices in the next few days, according to industry sources. Traders are also not releasing stock in the hope that prices would firm up soon, helping them to boost profits.

According to traders, cement prices traditionally peak during the summer months due to a surge in demand from the construction industry. Builders tend to complete as much work as possible in summer since construction comes to a halt during the four monsoon months. The construction industry has expressed apprehension that rising prices of cement and steel would force an increase in cost of property. Steel prices have shot up from Rs 28,000 per tonne from Rs19,500 per tonne. Afraid that price increases may cause potential buyers to put off purchases thereby hurting the real estate business, builders across the country went on a day’s token strike last March.
According to the Confederation of Real Estate Developers Association of India (CREDAI), the rise in cement prices coupled with possible rise in house loan rates would seriously hurt the construction industry. The construction industry also alleges that cement manufacturers have formed a cartel to push up prices. Cement companies have, however, denied the charges.