Cement producers reluctant to reduce prices

Hyderabad:  Cement producers are reluctant to reduce prices despite  dipping sales  in both Andhra Pradesh and Telangana following the ban imposed by builders on purchase of cement to protest the  steep increase in prices since June.

Normally, 20 lakh tonnes of cement is sold per month on an average in AP and Telangana in total. But this month, it is not expected to cross even the 10 lakh mark as builders in both states have boycotted the purchase of cement since June 26.

Two rounds of  talks between  Telangana  chief secretary Dr Rajiv Sharma and  the cement firms have failed to convince the firms to reduce prices. Barring assurances to consider reducing prices,  cement producers have not been  forthcoming on any decision so far.  

In fact,  cement prices have increased by Rs 10 per bag in  the last two weeks, much to the embarrassment of the Telangana government.
The  state government has now decided to seek the Centre’s intervention  in the matter to ensure reduction in prices stating that the construction industry has been plunged into a crisis.

Construction  activity has come to a standstill in  the last three weeks hitting the livelihood of a large number of construction workers.
Cement prices have increased by 50 per cent since June from Rs 200 to over Rs 300 per bag. Builders allege that the price rise was due to  the syndicate of  cement producers and demanded action against them.

Read: Cement boycott increases exports to Sri Lanka

However, cement producers  claim  that the increased prices are in alignment with prices in other states and that they were forced to sell cement at lower prices as there was not enough demand in  united AP owing to political uncertainty since 2009.

Now that the state has been divided and stable governments have been formed, they have increased the prices in alignment with with prices in other states. They also  claimed that they suffered huge losses due to low prices all these years.