Even despatches at 6.23 million tonnes were lower, compared to last October's cement offtake of 6.44 million tonnes.

Both production and despatches during April-October was, however, marginally higher this fiscal. Output during the first seven months of the current financial year stood at 43.83 million tonne, as compared to 42.38 million tonne in the same period last year, while offtake inched up from 42.17 million tonne to 43.81 million tonne during the period.

Cement company officials remained apprehensive that the industry may not be able to maintain the same level of growth as in the previous three years. The industry has been growing at 9.66 per cent, 8.45 per cent and 10.59 per cent in the lastthree fiscals.

"The low demand growth coupled with oversupply in certain high cement consuming areas like Gujarat and Maharashtra is really alarming. There are still no signs of demand picking up," said a senior marketing official at a leading cement company.

Prices in the Western markets have crashed to very low levels, with Gujarat prices falling to just around Rs 90 per bag. Even prices in the country's commercial capital Mumbai have sharply dropped to around Rs 135 per bag, as against Rs 165-170 per bag two months back.

Even in the south, prices have begun moving southwards due to an over-supply and large-scale price-cutting by some companies. Industry sources say the companies are forced to undercut because of the low offtake of cement during the monsoon. Monsoon arrives late in the southern states and construction activities remain dull in October-November.

Production in the last two months of the first half continued to fall with September production touching 5.74 million tonne against 5.87million tonne in the previous month. Despatches, similarly, plunged to 5.72 million tonne as compared with 5.80 million tonne in August.

Although the August and September production and despatch figures are lower as compared to the previous months, they compare favourably when compared with the figures of the previous fiscal.

Analysts maintain that cement companies, faced with dwindling demand, have been deliberately scaling down production. Production in the second quarter was 17.71 million tonne against 19.93 million tonne in the first three months.

Industry sources maintain that the western Indian markets are unlikely to be rescued immediately through an informal cartelisation of the sort that has been worked out by manufacturers in south India.

Most of the western Indian plants, say analysts, are relatively new, and therefore to reach their break-even levels, these companies have to push volumes. Such high volume marketing will not allow pricing arrangements to be worked out immediately, say theindustry watchers.

The western Indian price crash has begun largely due to a Gujarat contagion. With export prices low, the cement that was earlier heading out is now finding its way to nearby domestic markets, including Mumbai, as well as south India.