Cement firms raise prices again

Cement manufacturers have hiked cement prices in the North by 2 per cent with effect from October 1. This is the second price hike since March this year, when the cement industry promised the Union Commerce Minister Kamal Nath that it would not hike prices for one year even if there was an increase in the cost of inputs.

The last hike was done in July when companies increased prices by Rs 3-5 per 50 kg bag.

"Though, we are currently selling the previous stock at Rs 235 per 50 kg bag, once these are exhausted, the new stocks will be sold at Rs 240 per bag. All the companies have revised their selling prices from October 1," said a cement dealer in the capital.

However, the companies have not confirmed the hike. "The railways have increased freight charges from October 1 and we expect prices to go up soon. But nothing has been done so far," said an executive of a leading company.

Last week, all cement companies had raised prices by Rs 3 per bag in the West. Currently, the retail price per bag was ruling at Rs 260-265 in Mumbai, said Sanjay Ladiwala, president, Bombay Cement Stockists & Dealers Association.

The monsoon, which is considered a lean season as far as cement consumption is concerned, has largely come to an end "" a positive factor for the industry.

Inflation, which was the main concern behind all the government efforts made early this year to contain cement prices, has dipped to a five-year low at 3.23 per cent for the week ended September 15. Cement has a weight of 1.73 per cent in the wholesale price index-based inflation.

The government, on its part, has taken every possible step to keep cement prices under check, though with no success. In January, the government abolished the 12.5 per cent customs duty on cement imports but no imports took place as international prices ruled higher. In February, it introduced a dual excise duty in its annual budget, but prices moved up instead. In April, the government withdrew the countervailing duty on cement imports and in May it replaced the dual excise duty with an ad valorem duty.

However, the prices continued to move up.