LAHORE – Afghanistan has become the major market for Pakistani cement, as 2.41 million tons of cement was exported to Kabul during the last six months. Exports to other destination through sea, excluding India, also remained stable in comparison with the last six months of 2011-2012. However overall, month-wise data of cement exports continued to show slump, as exports in December declined by 10.55 per cent to 0.58 million tons.
Cement exporters, with a potential to export a large quantity to the Indian market, have been facing strict resistance by the Indian government as non-tariff barriers have not been removed even after having been specifically mentioned during the different rounds of official and unofficial talks between the two countries, industry sources said.
As far as exports to Kabul was concerned it showed 11.7 per cent YoY growth mainly contributed by 28 per cent share to Afghanistan, as total exports from Pakistan to Afghanistan estimated at 62 percent while exports to India declined by 44 per cent and other markets largely remained unchanged.
It is said that exports to India remain curtailed due to increased non-tariff barriers, stoppage of cement exports via rail network and most importantly limited attraction for exporters. It is surprising that on one hand there are talks of normalization of trade with India as both countries apparently optimistic for improvement in bilateral relations yet on the other hand tightening of non-tariff barrier on cement looks illogical in the face of on going positive talks of increasing cooperation between the two countries.
“During the first half of FY2012-2013, cement units located in South registered a growth of 7.98 percent in the local market but posted an even higher 16.34 percent decline in exports,” he said. “The majority of the cement capacity, however, is located in the northern part of the country where the industry posted a growth of 7.52 percent in domestic market, while exports declined by 1.31 percent only.” He added that the hype created on trade with India has so far not materialised and exports to that market stood at 0.209 million tons only during the last six months, which was well below the expectation of the cement sector and declined by 40.41 percent.
Growth in demand was attributed to pick-up in construction activity post cotton-crop harvest and increased government spending in infrastructure development in the pre-election scenario.
Exports to India, in fact, have been on a constant decline ever since the two countries opened their borders for liberal bilateral trade. “The decline is not due to lack of cement demand in India but because of very stringent non-tariff barriers created by our neighbour,” industry said, adding that Pakistan’s cement is preferred by Indians because of better quality.