Lifting the ban on cement exports is just a sentimental boost provided by the Indian government and will have no major impact either on demand or prices of cement as more than 90% of the exports are already taking place through Gujarat, say industry players.

The government had banned cement exports in April this year as part of efforts to increase local supplies and check rising prices. It, however, then lifted the ban on cement exports and had allowed exports via Gujarat ports. But now, when cement prices are declining and domestic demand is getting depressed due to slowdown in construction activity, the commerce ministry in a notification on the weekend, said it had allowed cement exports “with immediate effect”. Cement export is just 2% of the total cement production in the country. However, these measures will not have material impact and more is to be done by the government to boost the cement demand.

?Apart from this, the government should speed up infrastructure activity and give more loans to contractors to get started the real estate activity which is currently hit by the slowdown in demand,? said Vinod Juneja, MD, Binani Cement Ltd.

Moreover, continuing exports is another major concern for the cement export majors as both Ambuja Cement and UltraTech, the two biggest cement exporters in India, have expressed concerns on prices coming down in the export market. Export price of cement, which currently stands at $ 65 per tonne, is likely to take a dip of $10 per tonne. Players are also witnessing Chinese cement entering the Middle East market at competitive price.

AL Kapur, MD, Ambuja Cements Ltd told FE, ?Earlier, Dubai was an attractive destination for exports, which is not the case now. Prices are expected to remain flat. However, I am very positive that we will export at least 1 million tonne.?

Meanwhile, new capacities have also come up in the Middle East, which is the biggest market for exports from India. Hence, the demand-supply gap there is met internally. Also, during the month and half ban on exports in the country, Indian exporters have lost some clients, the advantage being taken by Pakistan cement manufacturers, resulting a dip in exports this year.

Cement exports in the current year from April to October 2008 was 1.44 million tonne against 2.15 million tonne in the same period last year, a dip of about 33%. Last year (FY2008) cement exports were 3.3 million tonne and clinker exports were about 2.1 million tonne.