Buoyed by a strong revival in demand, especially from the infrastructure sector, Indian cement manufacturers have increased prices by Rs13-15 per bag in Gujarat. Retail cement prices in the state, which over the last three years had been grappling with negative demand, have risen to Rs160-165 per bag - the highest in the last four years. Cement consumption in the state has risen by more than 50 per cent during the last three months. Industry officials say that the surge in groundnut production coupled with high edible oil prices are fuelling housing demand as well. As a result, cement prices in the state have risen by Rs25-30 per bag since last month. Retail cement prices in Surat, which had slid below Rs 100 per bag a few months ago, have bounced back to Rs165 per bag, while prices in Rajkot are ruling at Rs 156-160 per bag. In Ahmedabad, retail cement prices are pegged at Rs 160-162 per bag.
Industry officials say that the state’s investment in infrastructure projects have been gathering steam in recent months and this is also giving a fillip to cement demand. However, industry officials also add that the recent spurt in retail prices were also, to an extent, driven by transportation bottlenecks. "Now that truckers are barred from exceeding their loading capacities, there is shortage of trucks for transporting cement. Cement prices are therefore on the rise as supplies are not in keeping with demand," said an official.