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Cement prices for both these regions are likely to increase by an additional Rs 5 per bag due to shortages of rakes needed to transport cement
Cement prices in the western and southern regions are likely to increase by another Rs5 per bag in a week’s time, say dealers as well as analysts. Of late, both these regions have been witnessing a rise in prices riding on the supply shortfall due to transportation hitches, they said.
During the past month, cement prices in both the western and southern regions had gone up by Rs7 to Rs12 per bag. Cement prices across major cities in Gujarat have already increased by Rs5 with effect from Tuesday. “The current cement price is Rs195 per bag; it has increased by Rs5 today. It will remain at this price for the next 15 days,” said an Ahmedabad-based cement dealer.
“In Gujarat, the price of cement in major cities like Ahmedabad, Baroda, Baruch, Mehsana and Surat is expected to increase by Rs5 per bag with effect from 15th December. At present, the average price of cement per bag in Baroda, Surat and Baruch is in the range of Rs195-Rs200 per bag, which will be revised upwards to Rs200-Rs205 per bag,” said Sharekhan Ltd in a research note.
As per the brokerage report, cement prices in the major cities of Maharashtra are also likely to witness an increase of Rs5 by 21st December. Presently, the average price per cement bag in Mumbai is Rs240.
Cement prices in cities like Hyderabad in the southern region are also likely to increase by another Rs5 from Rs140-Rs145 per bag to Rs150 per bag in a week’s time. Currently cement in Hyderabad is priced at Rs140-Rs145 per bag.
In the northern region, cement prices have remained almost unchanged but dealers there expect the price to go up if the logistics problem continues any longer, the report further stated. The current cement price in New Delhi is Rs227 per bag.
Before the recent rise in prices, cement prices all over the country were on a continuous downfall. In a short span of time—between August and October 2009—cement prices had fallen from Rs230 per bag to Rs140 per bag.
The southern region was worst affected by the downfall. The current rise in prices for these two regions is due to a shortage of wagon supply to transport cement to these regions.
Wagons have been diverted to transport foodgrains, which is a priority sector. This recent price correction is expected to be a temporary phenomenon, with prices expected to go down after March 2010.