Imported cement of questionable quality has not yet reached the market, but its locally produced variant is available at considerably reduced prices suggesting that the recent price-hike was seasonal.
A source in the cement sector said the question mark on the quality of imported cement, which is yet to reach the local market, has 'exposed the government claim that permission of the duty-free cement import along with freight subsidy has brought down the prices.'
"A huge question hangs over the quality of the imported cement. I doubt if anyone involved in construction business would use the imported commodity in his new projects," he added.
The doubt on the quality of the cement has shattered the confidence of the consumers, in that the big construction companies 'may avoid using the imported cement for it does not meet the standards required under the Pakistani weather conditions.'
The imported consignments are still stuck up at the port, the source said, adding: "It means that cement prices have decreased due to decline in demand."
"Every year, the cement prices shoot up due to increase in demand in March and April, as was the case during the past two years. As soon as demand decreases, prices come down. This is exactly what happened this year too", he said.
Customs authorities at the Karachi port have branded the imported cement 'substandard'. According to specifications standards available with the Customs, the standard of the cement should be at less than 4 percent, Magnesia (MGO). But after the examination by the Customs the strength of imported cement was found to be 4.25 percent MGO. The higher presence of MGO increases expansion of cement consequently, loosing its binding strength. Most Pakistani cement manufacturers are producing 2-3 percent MGO standard cement.
He said the builders say the use of imported cement would be risky, particularly hinting at the earthquake-hit areas where the reconstruction drive has picked up momentum.
But he conceded that the ministry of industries has clarified that the imported cement quality is in accordance with the UK and Pakistani standards, although 'the statement of the ministry has not been backed by any authentic test report.'
Another source in the cement sector said the cement prices have come down despite the fact that the imported commodity has yet to reach the market in large quantities. This has exposed the government claim that the decision of allowing cement import has resulted in decrease in the prices, he said.
Construction experts generally hold the view that the imported commodity with higher MGO may work for some specific construction requirements, but it does not suit the general requirements of the industry needs.
Due to this issue, he said the government decision of allowing import of the commodity by road, rail or sea with zero-rated duties and Rs 60 freight subsidy per bar tons and 30 percent reduction in railway freight seems to be just an attempt to benefit a few.
The detention at the port will also make the imported cement subject to the demurrage charges, which will definitely push the price of the commodity upward.
In such a situation, the consumers will not be able to buy the cement at reasonable prices. Due to this factor, the consumer price of the imported cement may exceed the present price of locally manufactured cement, said another official in the cement industry.
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