Crazy rise in prices of cement [Archives:2003/662/Business & Economy]

August 25 2003

Ismail Al-Ghabiri
According to field sources the prices of cement have seen a drastic inclining during the past weeks from 600 YR to the latest rate of 1000 YR for the 50 kilos sack. Mr. Mohammed Yahya Shunaif deputy manager of the general establishment for cement was approached by the Yemen Times regarding this issue to which he replied saying: “the establishment has adopted a new mechanism for disseminating and monitoring selling of cement in the market. We will start activating this mechanism soon in the capital secretariat and the rest of governorates as a step in rectifying this price issue. Through this mechanism it is hoped that no monopoly of the material would take place and hence a standard price would be achieved”. Apparently this is a trend that took place in most of the neighboring countries like KSA where the price witnessed an increase by 62% and other gulf countries as well, he added.
The establishment has agreed recently with minister of trade and industry on procedures that would allow the general establishment for cement to import directly from outside in order to break the monopoly and the private sector, would also support the importing of cement. It is expected that the establishment would start importing in this month according to what Mr. Shunaif had said.
When interviewing a number of concerned people, about this topic we came with a number of interesting views. Mr. Jamal al-Lawzi university teacher explained that the increase in price of cement because of its scarcity would yield an increase of the cost of development projects, which in turn negatively affects development in general and on unemployment.
Mr. Mohammed Abdu al-Harazi who currently has a building under construction thought that the reason for increase in the prices is due to the increase in demand against the limited availability especially that imported amount covers only 50% of the local demand, and the rest is covered from the national production of cement. Moreover the recent international events affected the marine trading and hyped insurance rates, creating difficulties in importing. Not to forget that the local production has decreased lately because of the maintenance activities going on in the cement factories, he pointed out.
“The increase in the cement prices is because of the halt in some of the production lines in al-Burh, Bajil and Amran factories because of expansion and maintenance projects” Mr. Abdulraqib al-Udaini suggested. In the same time Saleh Ahmed Ali who works in construction expressed his disappointment at this issue because it means that contactors will either postpone or cancel many of the construction projects hence they would be out of work for many days to come. Concurrently, Mr. Qaid al-Radie'i confirmed Saleh's words by admitting that he had stopped many of the projects he was working on because of the raise in prices until things settle down to a cheaper rate.
Therefore, many agreed that the reason for this increase in prices is that demand is more than supply. And if things remain as they are then construction trend would fall down causing development to lag behind as a consequence not only that but also investment would take a much slower pace. In the same time unemployment would increase and due to all this the government must take urgent actions in order to see to it that demand is satisfied and development takes a more rapid pace.