Pakistan cement dispatches and exports slow in 9MFY22

Pakistan’s cement dispatches have slowed amid rising construction costs, a lower development budget and higher freight costs with 9MFY22 dispatches down six per cent, says Topline Securities.  

Topline analysts report that political noise, economic slowdown and rising cement bag costs could further affect dispatches going ahead. Along with the lower dispatches, rising coal cost is another key concern for the sector as global supply chain disruption, and the Russia-Ukraine war has kept the commodity prices elevated to date.

Pakistan's cement and clinker exports in the first nine months of FY21-22 (July 2021 to March 2022) earned US$199.37m in revenue by dispatching 5.227Mt of cement and clinker overseas, compared to US$210.045m from 6.247Mt of exports in the year-ago period. Consequently, the sector saw a rising slide of 5.1 per cent in dollar terms and reported a double-digit decline of 16.3 per cent in volume during the export period. However, exports valued in Pakistani rupees edged up of 1.1 per cent to PKR34.418bn (US$185.1m) during this period.

On a positive note, in March 2022 alone, export revenues increased 6.4 per cent MoM to US$19.817m on the shipment of 478,544t, compared to US$18.627m from 433,780t of exports in February 2022. The quantity increased by 10.3 per cent during this period.

However, when compared with March 2021 earnings of US$26.849m from 776,934t, this represents a drop of 26.2 per cent and 38.4 per cent YoY in value and quantity, respectively.

Pakistan has been exporting clinker/cement to Bangladesh, Sri Lanka, Afghanistan, Madagascar, South Africa, Tanzania and India. Export to India has been suspended for the last few years. Still, with a change in government in Islamabad, experts hope that Pakistan and India may revisit their trade suspension and resolve political issues. The export to Sri Lanka has also been hit due to the foreign exchange crunch in Colombo lately.