| Hard truth
New Delhi, May 2: The government today threatened to ban cement exports to check the sharp rise in prices over the past few months.
“Cement makers are profiteering. There has been an abnormal increase in cement prices in the northern and western regions,” commerce minister Kamal Nath said.
Domestic cement makers have been raising prices regularly since November last year as investment in infrastructure, housing and malls has led to a surge in demand.
Cement companies have raised prices by up to 11.4 per cent in South India in the past two weeks to cash in on the rising demand from the region’s construction industry.
Industry secretary Ajay Dua said the government would ask the cement manufacturers' association to explain the cause for the recent spurt in prices.
“We are meeting the association to understand why the companies have hiked prices. If it is unreasonable, we have to look into it,” Dua said.
A supply squeeze caused by a court ruling against overloading of trucks has also put an upward pressure on cement prices, which have risen more than a quarter since the beginning of 2006.
The latest increase has pushed up prices by Rs 20 per 50-kg bag to about Rs 195 for bulk buyers. Prices in Mumbai are even 15 per cent higher. The current prices are about 30 per cent more than those ruling a year back. Almost all big players have hiked prices.
Cement stocks fell from their peaks on the bourses today following the government reports.
The fall was recorded at the fag-end of trading. Index heavyweight ACC led the fall on aggressive selling by funds to book profits at existing higher levels.
ACC shares surged to Rs 1,060.90 before ending at Rs 989.40, recording a fall of Rs 24.10.
Grasim Industries moved between Rs 2,605 and Rs 2,450 before settling at Rs 2,469.65, recording a hefty fall of Rs 47.45. Gujarat Ambuja Cement also lost ground.