Pakistan's domestic dispatches dip 6% July-August 2019

Pakistan's cement industry saw receding cement demand in the first two months of current FY20 in Pakistan. The All Pakistan Cement Manufacturers Association (APCMA) attributes it to impact of economic contraction among other factors.

The industry dispatched 46.88Mt of cement in 2018-19, leaving a surplus of 9.12Mt. The domestic market remained under pressure in the last fiscal year as well absorbing only 40.34Mt, which was almost two per cent less than 2017-18, according to APCMA.
 
The new fiscal year that started in July further added to the misery of the sector. The domestic demand decreased by 2.6 per cent, from 3.04Mt in July 2018 to 2.97Mt in July 2019, while exports in July 2019 were 0.53Mt  registering a nominal two per cent increase when compared to the corresponding month of last year, when exports were 0.52Mt.
 
Furthermore, domestic sales in August 2019 stood at 2.66Mt, a fall of 8.6 per cent when compared to 2.9Mt in August 2018. Exports increased from 0.56Mt in August 2018 to 0.68Mt in August 2019, registering a healthy rise of 22.7 per cent. However, the overall dispatches in August 2019 declined by 3.6 per cent from 3.46Mt in August 2018 to 3.33Mt in August 2019.
 
It is worth noting that the regular increase in domestic demand in the southern area of the country in the last financial year saved the sector from total collapse. This financial year the uptake of cement has declined in the south by considerable 33 per cent in the first two months of FY20. The uptake in the north inched up by only 1.7 per cent, not enough to compensate for the decline.
 
A spokesperson of APCMA said that by facilitating the construction industry as a whole, the government could reduce the ever-increasing unemployment in the country. He said steps like increase in taxes on cement – high power and gas tariffs accompanied with axle weight condition on cement dispatches reduced the uptake of the commodity in the country. He said after withdrawal of axle weight condition the uptake would gradually increase.