Despite repeated attempts by the government to keep a tab on the escalating cement prices, cement prices in Mumbai, India’s largest market, is likely to increase by Rs 3-5 per bag from July 1 this year. Cement consumption in Mumbai is 7.5 lakh tonne per month of which about 30% – 40% comes from the western part of India (Gujarat) and around 10% from the south.
According to the sources, cement producers are in discussions to increase the prices from next month onwards. Dealers in Mumbai say that UltraTech, part of the Aditya Birla Group, has informed them that the company is likely to increase the price of cement by Rs 3 per bag. However, an UltraTech spokesperson could not be contacted for confirmation.
Similarly, Binani Cement is also considering to hike the cement prices. Confirming the move, Vinod Juneja, MD of Binani Cement Ltd, told FE, “We are in talks with our marketing team about this. Due of the rising input costs, we may probably increase cement prices by Rs 2-3 per bag from next month.”
It was felt some months ago that cement prices could remain stable but higher input costs, mainly of coal and fuel, left the companies with no option but to increase prices. Moreover, cement manufacturers, who are already reeling under the pressure of high input cost, had earlier in May this year, decided to hold the prices for the next 2-3 months as a move to mitigate inflation pressures.
According to the sources close to the development, cement producers are looking at the possibility of all players agreeing to increase prices of the commodity at the same time. The prices will be increased if all of them agree to hike the prices. These producers will come to a decision in a day or two, the source adds.
The prices in Gujarat have already gone up by Rs 5-7 per bag after the export ban was lifted. Producers are now looking at the possibility to increase the prices in Mumbai as well. Cement prices in Mumbai currently stand at Rs 255 – Rs 256 per bag.
Declining to give specifics about the prices, AL Kapur, MD of Ambuja Cement said, “I would love to pass on the increased price but it is not so easy. Everything depends on the demand-supply scenario.”Earlier this month, while talking to FE, Sumit Banerjee, MD of ACC Ltd had also expressed his concern on the price move of the commodity.