Rise In Cement Prices

Over a year, consumer associations and infrastructure experts remain divided on the reason behind the increase: Supply controls or sustained revival in demand. A property-industry association in south India attributed the price increase to coordinated supply controls, an alleged monopolistic practice that has earlier drawn the attention of the federal competition panel.

According to research reports, cement prices in February increased by `24-25 per bag of 50 kg, but the increase was more pronounced in south India, where prices increased by more than `60 per bag since January after manufacturers raised prices twice last month. Prices typically are soft in the peninsula through the winter months because the region receives northeast monsoons, preventing construction.

India is the world’s second-biggest producing and consuming market for cement, and prices are determined largely by local logistical factors. Typically, cement sales correlate with broader economic growth by a factor of about 1.3 in India. If underlying demand remains muted, the current phase of higher pricing may not sustain beyond a couple of months, said some cement analysts