KARACHI, March 3: While cement prices started climbing up in the market, retailers and dealers blame the manufacturers for the rates increase ahead of rising demand during March to June.

Retailers are seen charging Rs260-265 for 50 kg bag of Falcon cement as compared to Rs255 last week while Lucky Cement is now priced between Rs 250-255 as compared to Rs240. The Pakland cement is selling at Rs255-260 as against Rs250 while the 50 kg bag of DG Khan Cement is tagged at Rs 255 as compared to Rs240 earlier.

Retailers said that when they get the supplies at higher rates they can not sell at the lower price and have to pass on the impact to the consumers. The rising transportation cost after increase in fuel prices from March 1, will further push up cement prices.

President Karachi Cement Dealers Action Committee (KCDAC), Wali Bhai Patel said that the manufacturers had raised the prices by Rs2.5 to Rs5 per 50 kg bag two days back while maker of Falcon cement has pushed up the rate by Rs5 per bag in the last one week. He said the retailers charged higher prices from the consumers despite slight increase in the rates at the manufacturing level.

The cement demand has been average but the manufacturers have deliberately squeezed the production in order to create shortage in the market. Besides, the big companies are focusing more on enhancing exports.The cement makers have been enjoying a free hand in playing havoc with the prices in Karachi for the last few months, while in Punjab cement prices have not exceeded Rs200 per 50 kg bag.

He said when the producer of Falcon cement increased the prices the other companies followed the suit.

Wali urged the new PPP government to look into the matter as to why the cement makers created disparity in prices between Sindh and Punjab. The government should also initiate a probe into the frequent increase in cement prices by the manufacturers, he added.

Chairman Association of Builders and Developers (Abad) Babar Mirza Chughtai said that the cement manufacturers had raised the prices by Rs20-30 per 50 kg bag in the last two to three months.

He said that steel bar price was now quoted at over Rs60,000 per ton, which was Rs30,000-35,000 tons last year. Besides, frequent increase in prices of tiles, copper wire, electrical items, steel products, sand and gravel (reti and bajri) have been pushing up construction cost.

“In the last two years, the cost of construction has gone up by 30 per cent because of increase in the prices of basic materials used in the construction,” he said.

He said the builders were finding it hard to provide a low cost residential flat or a house to their clients in view of rising construction cost. Many times clients are seen clashing with the builders when they are asked to pay more after rise in construction cost.

On one hand, it is said that the cement stocks in the country are more than the demand, while on the other side, there has been slowdown in construction activities because of country’s political crisis coupled with rising cost of construction, Babar said.

Because of these facts, the demand for cement has fallen but cement manufacturers are bent upon increasing the rates. He said that the surplus quantity in excess of country’s consumption was being exported in large quantities.

Senior Analyst at Jehangir Siddiqui, Atif Malik said that the country’s total sale of cement was likely to cross 30 million tons in 2007-08 in which the share of local sales and export is estimated at 6.5 million tons and 23.5 million tons, respectively.

In 2006-07, the total cement sales were recorded at 24.22 million tons, of which local sales and exports stood at 21.03 million tons and 3.188 million tons. Cement is being exported to the Middle East, India and Afghanistan.

He said in July-Feb 2007-08, total local sales were registered at 18.7 million tons as compared to 15.24 million tons in the same period of last fiscal year.

In the last eight months, local dispatches of cement and exports recorded at 14.43 million tons and 4.26 million tons as compared to 13.5 million tons and 1.8 million tons in the same period of 2006-07.

Karachi Cement Dealers Welfare Association Convenor Shaukat Hussain said that makers of Falcon cement had increased the rate by Rs2.50 per 50 kg bag. It now costs at the retail shop at Rs251.50 after adding transportation and labour charges from the factory. But the retailers have the right to demand Rs260-265. He said Pakland cement has also enhanced the rate by Rs5 per bag.

A tile dealer in Gulbahar, Nazimabad, said that the price of locally manufactured tiles had surged by 20-30 per cent in the last one year and even Chinese tiles had become costlier by 15-20 per cent.