Ban looms over cement exports

WITH ITS BACK PUSHED TO THE WALL BY INFLATION, GOVT PULLS OUT ALL THE STOPS

Export ban will augment domestic availability, soften prices.

With rising prices spoiling the economic growth party, the government is ready to crack the whip beginning with a ban on cement exports.

Simultaneously, efforts are on to increase imports from Pakistan, which is willing to supply up to 11 million tonnes.

Yesterday, in the midst of the government's multi-pronged crackdown on inflation, the cement producers had announced a rise in prices.

The export ban will augment domestic availability while the cheap imports from Pakistan will soften prices.

"The government is considering a ban on cement exports. This follows the recent increase in prices by the industry," said a senior government official.

According to All Pakistan Cement Manufacturers' Association, the country has supplied 457,624 tonnes to India so far. Cement imports picked up only in September last year, when they became viable as a result of a duty cut.

Nearly all imports come from Pakistan at an average landed price of Rs 170-175 for a 50 kg bag. This is much lower than the prevailing domestic prices of Rs 230-235 in north India.

Cement producers in west India have increased prices by Rs 5 a bag, while a similar rise is expected in the north in the next few days. On an average, cement prices have increased by Rs 10 a bag since April 2007.

Cement exports between April last year and February this year stood at 3.33 million tonnes, down 38.78 per cent over the corresponding period of 2006-07 on account of higher price realisation in the domestic market. The major cement exporting companies are Gujarat Ambuja and Aditya Birla group's Ultratech.

India's annual cement production is estimated at 165 million tonnes. Cheaper imports of 10-11 million tonnes can soften domestic prices, feel experts. In January 2007, India scrapped duties on cement imports, following it up by abolishing the 16 per cent countervailing duty four months later.

Total Exports: Rs 1572 crore

Total Net Sales: Rs 27604 crore