Nepal prices set to rise on higher production costs

Nepal prices set to rise on higher production costs
Published: 02 February 2012

Tagged Under: Prices Nepal 

Cement prices in Nepal are set to rise by an average NPR30-40/bag as production costs escalate.  The increase is mainly attributed to rising petroleum and clinker costs, Nepal Republic Media reports.

"Currently, most companies have not increased the price as the demand of cement is very low but they are all set to increase the price sooner than later," said Dhurba Thapa, Vice-President of Cement Producer's Association (CPA) and proprietor of Tej Cement.

Cement consumption, which is around 3Mta, traditionally starts to pick up from mid-February. Cement is currently available in the range of NPR500-710/bag. However, despite low demand at present some companies have already begun increasing prices stating difficulties in meeting production costs.

The price of cement in Nepal is highly-dependent on the price of clinker imported from India. Aatma Ram Murarka, president of CPA and proprietor of Shaktiman Cement, notes: "As the price of clinker has increased in the Indian market, and this coupled with an increase in the price of petroleum products and prolonged hours of power cuts, the production cost has increased by almost 15 per cent due to which the companies are forced to raise the prices."

Tej Bom, proprietor of Ambe Cement, also noted that his company has had to pass on rising production costs to the consumer: "We have now increased the price only by NPR25/50kg sack not to create more burdens for the customers but the price will further go up within a few months.”

Producers had earlier increased prices last November by NPR50-60/bag citing an increase in the price of raw materials and high transportation costs. 

"As the production cost has increased by more than 10 per cent, the price of cement will further go up by 30 to 40 per cent within a few months," informed Murarka.