KARACHI, May 26: Pakistan has for the first time entered export market of clinker by exporting around 100,000 tons to the United Arab Emirates (UAE) where construction boom has created a strong demand for cement.

The UAE had been importing cement from Pakistan and other sources, but surge in demand has compelled developers and builders to import clinker which could be converted into cement by further processing.

There is a strong demand for Pakistani cement in the Middle East, Africa, Far East and Indian market.

During the current month, around 340,000 tons of cement has, so far, been exported which is the highest in a single month. Around 30,000 tons was exported to India through sea and another around 58,000 tons by rail, official figures disclosed.

However, the biggest impediment in export of cement and clinker is a sudden surge in freight rates which have increased by more than three-fold.

A leading cement exporter Amjad Rafi told Dawn that up to April 15, freight for a 20 feet box to Jabal Ali port was $250, but on April 25 it jumped to $800 per container, leaving exporters in a quandary.

This means, he said, when freight charges were $250 per container of 25 tons capacity, freight charges used to be around $10 per ton but after the increase the per ton freight charges have gone up to $32 whereas the average quoted price of cement to the UAE is $70 per ton f.o.b. Karachi.

He further stated that in the past cement exporters used to book shipments even a month earlier but ever since freight charges are being frequently increased exporters enter into export contracts only week prior to shipping schedule to avoid extra freight cost in case there was any change.

Amjad Rafi said frequent changes in freight charges had forced us to turn down many export inquiries.

On an average, he said, roughly 150,000 to 200,000 tons of export inquiries were being received per month but mostly they were refused owing to highly volatile freight charges.

An official of a leading cement manufacturing group, requesting anonymity, said that since last year we had an exportable surplus of cement and by chance for the first time India also ran into shortage which gave our country a golden opportunity to meet their demand and also improve our balance of trade which had always been in their favour in the ratio of 70:30.

Unfortunately, he said ever since cement exports began about a year back there had been unlimited problems starting with non-tariff barriers from Indian side and acute logistic problems through land and rail, he added. However, during this entire period no government ministry or department came forward to sort out these irritants, he maintained.

He further stated that cement and clinker exports fall under the category of non-traditional items for which the Trade Development Authority of Pakistan (TDAP) is committed to give freight subsidy.

As per TDAP rules, export of goods to non-traditional markets also qualify for getting freight subsidy.

Therefore, he said in both cases cement qualifies for freight subsidy but so far the TDAP has remained indifferent to all issues and problems faced by cement exporters for the last one year.

At a time when the country needs to explore all avenues to increase exports, he said the TDAP high-ups were least concerned about such opportunities which fall in their way.

Responding to a question, another cement exporter Rauf Merchant said clinker which is one step short of cement had been exported to the UAE at an average price of $58 per ton and still there was a great demand as many inquiries are being received. He, however, said that high freight charges have forced many African and Middle East importers to revert back to their traditional suppliers.