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Cabraal and manufacturers at odds over steel and cement demand 

30 Jan 2022

  • Governor says more imported in 2021 due to increased demand
  • Importers say import value rose due to price hike, not demand 
Sri Lanka has imported massive quantities of iron, steel, and cement worth $ 840 million in 2021, indicating higher demand than other years, according to Central Bank of Sri Lanka (CBSL) Governor Ajith Nivard Cabraal – a claim contradicted by importers and official data. Responding to a query by The Sunday Morning Business, the CBSL Governor said that iron and steel imports for last year were almost at the highest value in history at nearly $ 700 million, while cement imports were close to a massive $ 140 million.  He said that these massive values indicated that there had been sufficient forex for such imports. “The demand this year for iron, steel, and cement is also very high, and importers for these commodities are continuing to import them in very large quantities, as a result of which a large amount of forex is required,” Cabraal said. However, cement importers deny that there has been any spike in demand for cement in the local market resulting in more imports in 2021. A cement importer told The Sunday Morning Business that the major reason for the recent price hike in cement was the hike in international prices, which had seen a rise of 60%-70% in the last year. According to him, the price hike and difficulties in opening Letters of Credit (LCs) in banks which only provide 50% of the requested amount due to the dollar shortage has actually brought down the monthly cement imports by 20%-25% in the last three months. According to the CBSL report for the month of November 2021, it indicates that 2,228,000 MT of cement was imported between January and October while in the same period in 2020 it was 2,765,000 MT. In 2020, total cement imports were 3,252,000 MT worth $ 97.22 million. Meanwhile, the United Nations COMTRADE database on international trade showed that Sri Lanka had imported iron and steel to the value of $ 544.12 million in 2020. “There definitely hasn’t been an increase in the consumption of cement. Since there were two or three months of lockdown, an increase in consumption is not practical,” the importer said. Moreover, he said that the big time cement importers and local manufacturers already had a backlog of cement supply, which would take at least another two or three months to be cleared. Speaking to The Sunday Morning Business last week, Association of Bagged Cement Importers Chairman Azmy Hussain Mohideen said that the shortage of vessels, price hike in India and Thailand, and the forex crisis had created a shortage of cement in the local market. According to him, out of the suppliers, only Pakistan is supplying cement to Sri Lanka as importers have stopped getting cement from other markets due to massive price hikes. The Consumer Affairs Authority (CAA) has already launched raids and started taking legal action against those selling cement above the price marked on the bags. The Government removed the Maximum Retail Price on cement back in October 2021 in the backdrop of importers and local manufacturers calling for a price hike due to the increase in international market prices. (IR)


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