Cement prices rise 10% in Feb

Cement prices have continued to rise by more than 10 per cent this month to Rs 220 per 50 kg bag in retail markets of western India, including Mumbai. Dealers expect the prices to jump by another 10-15 per cent in March.

The whole-sale prices have also seen a steady increase and have gone up to Rs 190 per bag from Rs 165 about a month ago. The Delhi markets too, say dealers, have seen a similar rise and the retail prices have risen to Rs 205 per 50 kg.

"The price hike reflects the increase in demand and also the effect of the Supreme Court ruling on overloading. There are fewer trucks available to transport cement," said Sanjay Ladiwala, president, Association of Cement Stockists and Dealers, Mumbai.

"There is a good indication that the prices will cross Rs 225 in retail and touch the Rs 200 mark in the wholesale market within a month," he added.

The Supreme Court's November 10 ruling refrained the state governments from imposing penalties on overloaded vehicles and thus legitimising overloading.

Several states including Punjab, Gujarat, Maharashtra, Karnataka, Rajasthan and Uttar Pradesh allowed trucks and other transport vehicles to carry excess weights using Section 200 of the Motor Vehicles Act.

"The overloading can be as high as 80 per cent and on an average 30 per cent. So the immediate effect will be the increase in freight charges, pushing transportation costs and thus, prices up by 30 per cent," says an industry analyst.

Traditionally, demand picks up in the first four months of the year in the cement industry. "Now, supply constraints due to lack of enough trucks, has only increased the prices further," says an official from one of the leading cement companies.