Islamabad: According to the Pakistan Bureau of Statistics, the cost of a 50 kg bag of cement has increased significantly in Pakistan, to as much as Rs1,500, as of July 8. This steep price increase is significantly impacting construction projects, particularly in major cities like Lahore and Peshawar.
Details indicate that Peshawar and Lahore are the two cities most impacted by this price increase. In just one week, Larkana has seen a startling rise of Rs 207 per bag. Likewise, there have been notable increases of Rs177, Rs163, and Rs160 in Peshawar, Bannu, and Quetta. In other areas, prices in Islamabad have increased by Rs151, Sargodha by Rs160, and Multan by Rs 155. There was a 150 rupee hike per bag in Karachi and Lahore. There were also noticeable gains in Gujranwala (Rs147), Sialkot (Rs130), and Faisalabad (Rs140), while there were increases of Rs120 and Rs107 in Hyderabad and Rawalpindi, respectively. Khuzdar stated that over the week, there was a far more modest rise of Rs23 per bag.
The decision to raise the federal tax on concrete from Rs3 to Rs4 per kg in the most recent federal budget is what caused the price hike. This shift has had a significant effect on real estate development and building projects throughout the nation. Builders and developers are facing escalating costs, which are likely to be passed on to consumers, potentially slowing down the pace of construction and increasing the overall cost of real estate.
This price hike is also causing concerns among small-scale builders and individual homeowners who are finding it increasingly difficult to afford construction materials. The rising costs may delay ongoing projects and discourage new developments, affecting the housing sector and infrastructure growth.
In contrast to the domestic challenges, Pakistan’s cement exports surged by an impressive 72.16% in May 2024 compared to the previous year. This surge in exports underscores robust international demand amidst domestic price hikes, highlighting both challenges and opportunities for Pakistan’s cement sector moving forward.
The increase in exports is a silver lining for the industry, indicating strong international markets for Pakistani cement. However, the domestic price hikes present a critical challenge that needs to be addressed to maintain a balance between local development needs and export profitability.
The current scenario highlights the dual challenges faced by Pakistan’s cement industry: managing the impact of domestic price surges while capitalizing on growing export opportunities. As the government and industry stakeholders navigate these complexities, the focus remains on finding sustainable solutions to support both domestic construction and international trade.
