The Hindu Business Line : Govt bans cement exports to stem price rise

New Delhi/ Mumbai, April 11 The Centre on Friday decided to ban cement exports from the country in an apparent attempt to improve supplies in the domestic market and stem cement price rise during the coming months.

“We have decided to ban cement exports. The order would be issued today. April-June is a period when demand for cement in quite high.

“This move would improve availability of cement,” Mr Kamal Nath, Union Commerce and Industry Minister, told reporters soon after he announced the annual supplement to the foreign trade policy here today.

Official sources said that the Government was, through this move, trying to send a signal that it would step in to address inflationary concerns.

‘Domestic prices unlikely to be impacted’

However, analysts contend that the ban on cement exports was unlikely to have any major impact on the domestic prices as the industry’s annual export was not more than two per cent of total production.

It was felt that companies need not reduce price at all as domestic demand was quite strong.

“Cement production in fiscal 2008 was about 166 million tonnes, while all the cement companies put together would have exported just four million tonnes for the entire fiscal,” said an analyst.

The high price realisation in the domestic markets had forced many companies to curb exports on their own.

“The average domestic prices are hovering above Rs 3,200 a tonne whereas in the exports market it is around Rs 2,200 a tonne,” said a cement company official.

Cement exports between April 2007 and February 2008 stood at 3.33 million tonnes, down 38.78 per cent over the corresponding period last year.

The major cement exporters include Ambuja Cements and Aditya Birla group’s Ultratech.

Duty scrapped

To ease supply constraints and facilitate imports the government in January 2007, scrapped duties on cement imports and followed it up by abolishing the 16 per cent countervailing duty.

To discourage cement exports, the government had recently withdrawn Duty Entailment Pass Book benefit on cement.

Related Stories:
Govt mulls more cement imports: Kamal Nath
Drop prices or face takeover, TN tells cement units

More Stories on : Cement | Exim Policy | Exports & Imports | Economy

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page