Cement prices in Nepal rise sharply due to clinker shortages

The tightening supply of cement amid a backdrop of increased demand has resulted in a sharp rise in cement prices in Nepal, with both cement manufacturers and retailers increasing prices in recent weeks.

Cement prices in Chabahil, Kalopul, Gausala and Maitidevi have increased by NPR100 (US$0.97) per sack over the past week, according to a survey by The Himalayan Times. The price of a sack of Ordinary Portland Cement (OPC) rose by NPR100 per sack to NPR950 per sack. Meanwhile, a sack of Portland Pozzolana Cement (PPC) has increased to NPR800 per sack, up from NPR700 a week earlier.

"Cement price have become dearer in the wholesale market. With [an] increased wholesale rate of cement, we are obliged to increase the cement price in the retail market," said Rajkumar Dangal, a cement retailer based in Chabahil.

Cement manufacturers have said that the price of cement has not been increased formally so far. "We have not formally hiked the price of cement. However, its price might have been fluctuating following mismatch between supply and demand of the product in the market," said Dhurba Thapa, president of Cement Manufacturers' Association of Nepal (CMAN).

According to Thapa, domestic prodution has been impacted by difficulties in importing clinker from India, which has affected cement production at the domestic grinding plants. Out of a total of 50 cement plants operating in the country, 37 do not have their own clinker production and therefore rely on clinker imported from India.

"If the government does not address this issue on time, a number of cement factories will have to stop production due to the unavailability of clinker," he stated.