LAHORE, April 27: Cement producers on Thursday further cut down the ex-factory prices to Rs300 per 50kg bag, a day after the issuance of notification that allows duty free cement imports with freight subsidy from India through sea, land and rail routes.
With the decline in the ex-factory price of cement, the retail market further eased. “Today the retailers sold cement at Rs320-330 per bag, down from Rs335-350 a bag on Wednesday,” a dealer said.
The cement manufacturers have gradually been reducing their prices for the last several days in view of continuously falling sales on the prospects of import of cheaper Indian cement as well as decrease in construction activity owing to the start of wheat harvesting in Punjab.
A senior executive of a cement company told Dawn that a bag of cement was costing Rs310 (including Rs10 per bag transportation charges) to the dealers.
He admitted that the issuance of the notification allowing duty free import from India with a substantial freight subsidy had played a crucial part in forcing the manufacturers reduce the prices. He also conceded that the producers would be forced to slash their prices further once the cement actually started arriving here from India.
He said the Indian cement should not cost more than Rs230-240 per bag in view of the concessions, including freight subsidy, allowed to the importers by the government.
It may be recalled that the producers have brought down their prices from the record high of Rs360 per bag which pushed the consumer prices up to Rs430-500 per bag in different parts of Punjab. The manufacturers said they raised their prices after the distributors and retailers increased the consumer rates of cement in view of its increased demand during March and early April. The distributors and retailers deny the charge, saying they did not raise the price unless factories hike their rates.
It is pertinent to mention that the government has allowed on April 14, duty free import of cement from India with a hefty freight subsidy to increase the supply of cement in the local market to meet the increasing demand, which was said to be the main factor responsible for the rising prices.
