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Tirupati: Despite low demand, cement prices touch 400 mark
- Even after the govt eased lockdown restrictions, the construction sector has not witnessed any major push and facing problems with sand supply and labour issues Though the invoice price was about Rs 380, companies offer discounts and ask sellers to sell each bag at Rs.320 till March-end
- Dealers wonder the price hike when demand falls by about 60 per cent
Tirupati: The cement prices in the state have been fluctuating against the basic economic principle of demand and supply. Naturally, the prices of any commodity increases when demand overtakes supply. But, shockingly, it does not apply to cement prices in the state, thanks to the strong cement cartel.
The Covid-19 induced lockdown has pushed every sector into a standstill with no activity had taken place for almost 55 days.During lockdown 3.0 only, some sectors got relaxations among which construction sector is one. Still, construction activity is not going for a ride due to various problems like non-availability of sand and labour. Undaunted by these shortcomings, cement companies have increased the price of each 50 kg bag to Rs 400.
It was around Rs 320-340 by the time lockdown was imposed during March-end. Though the invoice price then was about Rs 380, companies offer discounts and ask sellers to sell each bag at Rs.320. When the government has relaxed restrictions on construction activity in the last week of April, cement companies denied any discounts and asked to sell each bag at Rs 380. Almost from May 1, the price was further increased to Rs 400 without any discounts. Cement dealers have been surprising over the move as there was no movement of stocks with sluggish activity and they are having sufficient stocks.
Moreover, the production is going on large scale resulting in huge supply. In this scenario, instead of fall in prices, they wonder that the prices are going up. When contacted, the president of Tirupati Chamber of Commerce and cement and steel merchant A Manjunath told The Hans India that during normal day that Tirupati witnesses a demand of about 18,000 tonnes to 25,000 tonnes per month whereas the district demand amounts to about 80,000 tonnes per month. Out of this, almost 50-60 per cent fall in demand is there now.
He observed that it takes a long time for the construction activity to bounce back as income generation has taken a big blow during this Covid-19 pandemic and industrial activities almost came to a halt. Even the incentives being announced by the government like abolition of power charges have not reached the small industries yet.
Another dealer commented that, cement companies want to gain from the sluggish demand by resorting to huge increase in prices which is crazy. They are going with the attitude that people will never stop buying cement because of higher prices when they need it.
