The cement manufacturers’ decision to stop bulk bookings is worrying the builders in the State. The cement prices have gone up by Rs. 50 to Rs. 70 per bag.
A premium quality cement bag, which used to cost Rs. 260 to Rs. 270 a fortnight ago, is now available at Rs. 300 to Rs. 320. Non-premium quality cement prices are hovering between Rs. 300 to Rs. 315 as against earlier price of Rs. 245 to Rs. 250.
The companies have stopped ‘institutional sales’ and are suggesting buying from their trader network. There are about 200 cement dealers in the city meeting the requirements of institutional and retail buyers. They sell close to 3 lakh to 4 lakh bags cement bags per annum to the builders in the city.
With the prices shooting up, the builders see a “dirty game” by the industry at a time when the State is expected to witness huge demand in the days to come. “The cement companies appear to have formed a syndicate, creating artificial scarcity. We are not able to do anything,” says Greater Vijayawada Builders’ Association chairman Gadde Rajling.
Given the present scenario, the prices are expected to go up further. The price will escalate to Rs. 400 per bag by end of February, he feels.
Confederation of Real Estate Developers’ Association of India (CREDAI) Vijayawada chapter president Y.V. Ramana Rao recalls that the companies played similar trick six months ago. The cement price was abnormally increased by Rs.100, taking the price per bag to Rs. 300 plus then. Following a hue and cry, the companies slashed the price to Rs. 250 per bag for bulk bookings. In retail it used to cost Rs. 10 to Rs. 15 more per bag, he says.
Then, the manufacturers increased prices across the southern states by Rs 60 in Tamil Nadu, Rs 40 in Karnataka, Rs 40 in Kerala and Rs 100 in Telangana and Andhra Pradesh. The cement prices touched Rs 300 and Rs 350 per bag from Rs 150 and 170 in July. So, the builders observed a ‘purchase holiday’. Subsequently, the price was slashed, he explains.
“The builders’ joy over ease in sand supplies has evaporated with cement manufacturers stopping bulk dispatches,” he added.
