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Cement dispatches fall 9.07 percent on sluggish exports - Inside Financial Markets

Cement dispatches fall 9.07 percent on sluggish exports

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Cement dispatches declined 9.07 percent to 5.214 million tonnes in October 2021 against 5.735 million tonnes dispatched during the same month last fiscal, on massive decline in exports due to supply chain constraints.

According to All Pakistan Cement Manufacturers Association (APCMA) data, local cement consumption during October 2021 was down 5.29 percent to 4.603 million tonnes, compared to 4.859 million tonnes in October 2020. Exports suffered a massive 30.09 percent decline as volumes reduced to 611,884 tonnes in October 2021, due to global supply chain snags triggered by surging freight rates, with rupee devaluation of 0.69 percent in October adding to the woes. In October 2020, export dispatches were 875,266 tonnes. In October 2021, factories up north struggled as domestic dispatches declined 8.01 percent to 3.831 million tonnes from 4.164 million tonnes in October 2020. However, south-based units saw robust growth of 11.01 percent, with domestic consumption at 771,755 tonnes in October 2021, compared to 695,221 tonnes during October 2020.

Overall exports declined from both regions. Exports of north-based manufacturers went down 74.03 percent to 73,608 tonnes in October 2021 from 283,389 tonnes in the same month last year, with exports of southern units down 9.06 percent to 538,276 tonnes, compared to 591,877 tonnes during October 2020.

During the first four months of the current fiscal year, total cement dispatches (domestic and exports) were 18.039 million tonnes that calculates to 6.68 percent lower than 19.331 million tonnes dispatched during the corresponding period of the last fiscal year. Further analysis indicates that domestic uptake of the commodity slightly increased by 1.1 percent to 15.882 million tonnes from 15.713 million tonnes during July-October 2020, whereas exports during the same period declined by a massive 40.4 percent to 2.157 million tonnes from 3.617 million tonnes during July-October 2020. Domestically, factories up north dispatched 13.314 million tonnes in July-October 2021, down 2.3 percent, from 13.627 million tonnes in the same period last year. Exports on the other hand declined 49.06 percent to 461,275 tonnes, compared with 905,575 tonnes.

Dispatches from the factories in south dropped 23 percent to 2.56 million tonnes during July-October 2021 over 2.08 million tonnes during the same period of last fiscal. There was however massive decline of around 37.45 percent in exports from south zone as the volumes reduced to 1.696 million tonnes in the first four months of the current fiscal, from 2.712 million tonnes during the corresponding period last fiscal.

APCMA spokesman said that continuous increase in input costs and recent hike in rupee were major concerns for the industry. These price escalations were seriously affecting the cost of doing in local as well as international markets. He requested the government to take notice of declining exports and support industry to compete in the international markets.

Syed Zaki Hussain

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