The price of cement in Chennai has touched a new high of Rs. 400 for a bag weighing 50 kg.
Stockists say once increased freight rate for coal and hike in excise duty on cement announced in the Railway and the Union budgets come into effect, prices would go up further.
A representative of Chennai, Chengalpattu and Thiruvallur Cement Stockists’ Association said that they had been selling cement at Rs. 400 a bag for over a fortnight, though there was no special spike in demand.
Developers said construction activity had picked up, but manufacturers were responsible for the price rise. “Cement is sold at Rs. 260 a bag in North India.
There is a 70 per cent price difference between the cement cost in North and South India,” said N. Nandakumar, president of CREDAI Tamil Nadu.
An analyst of a Mumbai-based brokerage firm said cement price in North India was stable as its demand grew around 5 per cent, unlike in South India.
Cement factories in South India were operating at less than 50 per cent of their production capacity.
A representative of a leading manufacturer said price rise extended to other construction materials too, especially river sand.
Transport cost and inability to operate plants to their full capacity were the most important reasons, he said.
