Pakistan: Economy

Cement exports may rise as shortage persists in region

Cement exports from the country are still lucrative due to the commodity’s high demand and shortage in the region, especially in India and the UAE, placing Pakistan in a favourable position to further increase its exports, a report says.
According to latest data, cement sales increased by 24 per cent in 10 months (July-April) of fiscal year 2008. This growth has been primarily due to a 142 per cent jump in exports during the period.At present, neighboring India and the United Arab Emirates are the key export markets for Pakistani cement because of an unprecedented increase in their construction activities, brokerage house JS Research reported.
Indian authorities have been desperately trying to reduce local cement prices to ease rising inflation. For this purpose, they have in the past six months imported around 300,000 tons of cement from Pakistan and are planning to double it to 600,000 tons by June. Currently, India is facing a shortage of around 5 to 6 million tons per annum.
Cement demand in the UAE is likely to stay higher with an expected 23.5 per cent growth in construction activities this year. Moreover, with cement shortage of around 2.5 to 3.5 million tons in the UAE and export ban in major exporting countries like Egypt and India, Pakistan is poised to reap the benefits of regional shortages. Besides, the shortage of limestone in the Middle East is expected to keep cement production under pressure in the region.
Along with cement, clinker demand is rising in the UAE. As clinker price free on board (fob) from Pakistan is low at $64 to $66 per ton, it is quite cheap for the UAE importers.Cement prices in India have slightly come down after the government imposed a ban on exports. Prices, which averaged 243 to 247 Indian rupees per bag (Pak Rs374-380 per bag), have now eased by 3 to 7 Indian rupees (Pak Rs5-10) to Rs238 per bag (Pak Rs367 per bag).