There has been a sudden increase in cement price by about ₹80 - ₹100 per bag in Telangana and Andhra Pradesh.

The price which was in the range of ₹200 - ₹245, last month has gone up by almost 50 per cent in the last one week.

“Today, we are selling cement at ₹280 per bag with little variation depending on brand as all companies have hiked prices,” M Bharat of Maruti Traders told Business Line here on Thursday. In Andhra Pradesh, the price is a tad higher.

Bleeding sector However, enquires with companies and traders revealed no tangible increase in the demand and the increase has come as a surprise for retail buyers as well as builders even as companies declined to come on record on the reasons. When contacted, a top-executive of cement manufacturer said the industry was bleeding steadily in Andhra Pradesh with lower prices and under utilisation of the capacities for a long period. “There has been a strong need for price correction and I believe this is function of existing demand and supply,” he said.

In the last one year, the input costs surged for the industry especially in the form of coal prices, power tariff hike and diesel prices and pushed many firms ‘unviable’ business, he claimed.

‘Syndication’ Industry experts feel that the hike was actually ‘syndication’ as the industry hopes to cash-in on the expected rise in demand due to formation of stable government in the centre and states and prospective launch of welfare schemes and infrastructure projects.

In the meanwhile, the builders have alleged foul play and demanded that the ‘unwarranted’ price increase should be rolled-back.

C Sekhar Reddy, President, national of real estate body, Credai, said, “It was surprising to see this sudden spurt in cement prices, which have shot up by about ₹80 to ₹100 per bag in the past few days. What is the reason for this sudden increase in prices at time when they actually fall a bit as the construction activity pace tends to slow down during this time and monsoons.”

He said, “It is not clear as to why this hike has been brought about. This will escalate the cost of construction in the infrastructure and real estate segments. The per square foot construction cost will go up by about ₹70 to ₹100. Such hike is hard to absorb and would have to be eventually passed on,” he said.

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