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Pakistani cement exports grow despite challenges in India, Afghanistan

Truckloads of cement from Pakistan are languishing at Attari border since February 16 when import duties were increased to 200 percent by India. Indian importers have mostly paid for these goods.

News Desk |

The Pakistan Bureau of Statistics (PBS) data shows that the country’s cement export value and volume rose during first eight months of the current FY 2018-2019, despite dwindling exports of cement to Afghanistan and India.

Pakistan’s cement industry earned foreign exchange revenues of $205.86m by exporting 4.83Mt of cement/clinker during the eight months of July 2018-February 2019, compared to $149.71m at 2.98Mt in the same period last year, according to the PBS.

This translates a year-over-year (YoY) growth of 37.5 percent in terms of value in a dollar and 61.9 percent in terms of volume, respectively. In terms of Pakistani rupees, the exports advanced 69.3 percent YoY during this period to Rs27.04bn ($193m). However, the value in US dollars fell from $50.18/t to $42.61/t in the reporting period.

Truckloads of cement, dates and some other items from Pakistan are languishing at the Attari border since February 16 when import duties were increased to 200 percent by India.

In the month of February 2019 alone, the country’s cement industry earned foreign exchange revenues of $21.51m by exporting 504,361t compared to $27.34m at 655,317t in the previous month, and $13.24m from 265,199t during February 2018. This shows a month over month (MoM) decrease of 50.2 percent and 42.6 percent in terms of value and volume but a YoY increase of 62.5 percent and 90.2 percent in terms of value and quantity, respectively.

All Pakistan Cement Manufacturers Association (APCMA) is yet to update its export data, but it is generally believed that exports of cement to Afghanistan and India remained contracted during this period. However, seaborne exports have increased during this period.

Local media sources say that exports have been shifting from Afghanistan with Pakistani producers shipping to other countries. Moreover, there is also a shift from cement to clinker as Pakistan gains the upper hand in terms of competition between clinker-exporting countries. Growth in exports is being reported with each passing month.

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Experts point out that Pakistani cement in Afghanistan is no longer finding market access as much as it used to. Until 2006 Afghanistan was Pakistan’s only cement export market. While exports to other markets became a reality, the share of Afghanistan in Pakistan’s total cement exports remained high. At their peak, exports to Afghanistan were 55 percent of all cement exports in 2012. This share started moving south as other African and Asian markets opened up, and moreover, Afghanistan opened doors to cement imported by other countries, including Iran.

The other interesting market is India, which has never exactly granted game-changing market access to Pakistani cement in the first place and is itself a major cement manufacturer.

Even so, Pakistan has been selling over 0.5Mt of cement since 2008 which climbed to 1.2Mt in 2017 and 2018. This cement was going mainly to markets like Amritsar or Mumbai, where Pakistani cement is 10 percent cheaper. However, it is unlikely that after the recent political pressures, which ultimately impact economic relations, Pakistani cement will continue to find a market in India. Even if cement can reach some markets through the border, the 200 percent duty on Pakistani goods will make them entirely unviable.

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Incidentally, the Indian tariff step seems to have boomeranged on India itself. Truckloads of cement, dates and some other items from Pakistan are languishing at the Attari border since February 16 when import duties were increased to 200 percent by India. Indian importers have paid for these goods mostly, but they find it impossible to take delivery because of the duty hike.