Pak cement loses price advantage

Cement imports by Pakistan are losing the price advantage over the Indian cement owing to the sharp depreciation of the rupee against the dollar.

The imported cement that was selling at Rs 200 a bag (of 50 kg) two months ago is now selling at Rs 215 while the Indian cement is selling at Rs 225 (in Punjab markets). As a result, the average daily import from Pakistan has decreased from 4,000 tonnes to 2,000 tonnes.

“The rupee depreciation has made cement imports unviable on Monday. Even the Pakistani rupee has depreciated in relation to the dollar but the companies in Pakistan are not reducing rates,” said Anudeep Singh Madan, president of the Cement Importers Association.

The rupee has depreciated by more than 12 per cent since May this year. Pakistan has exported nearly one million tonne of cement to India since September 2007. Leading real estate players like Emaar MGF and Ansal API are using some of the imported cement to partly offset the impact of high input costs.

“While exports to India were affected due to rains during July and August, the trend has continued in September as well, owing to the rupee depreciation,” said Shahzad Ahmed, secretary, All Pakistan Cement Manufacturers’ Association (APCMA). In the current quarter, overall imports from India via the rail route have dipped. As a result, the wagon availability to undertake exports from Pakistan has come down, he added.

Madan said the Indian Railways have increased the demurrage charges on the imported cement by three times last week. “While the demurrage was Rs 100 per wagon per hour after first fourteen hours of wagon placement, it has been hiked to Rs 300 now. On certain days, if the wagon is placed late in the evening we find no labour to unload and move. Consequently, demurrage charges pile up. Instead of facilitating import, the railway is making it unattractive”.