Freight charges hit Pakistani cement exports to India

ISLAMABAD: Pakistan's cement exports to India have slowed down because of rising freight charges and non-availability of railway wagons despite increasing orders, say exporters.

Officials of the cement manufacturing companies in Pakistan told IANS that freight charges to India on cement had been increased by almost 200 percent in the last two months.

They also said that they were facing difficulty in getting wagons to export cement by train.

"The freight charge from Karachi port to an Indian port was just $3 per tonne about two months back, now it is $9," Saifuddin Khan, general manager marketing of Lucky Cement, said.

He said there was no particular reason for the massive increase. "When the shipping lines realised that they can get business from Pakistan to India, they increased the price," he said.

Khan said his company had received more orders from India.

"Our cement is cheaper than Indian cement and the quality is much better," Khan said, adding that Lucky Cement was sending 40,000 tonnes cement to India every month.

Tasneem Ilyas, operation manager of SGS (Society General Surveillance), which inspects most of the cement consignments sent from Pakistan to India, admitted that cement export has slowed down but said he was not aware of the reason.

She said that most consignments were tested by her company for quality and the cement being exported to India "is of higher quality than the standards set and required by the Indians". 

"According to our reports, not a single consignment has been found below standards," Ilyas said.

She said they were in touch with India's Minerals and Metals Trading Corp (MMTC).

With the export of cement, trade between the two countries has taken a significant step forward. At least five Pakistani companies approved by the Bureau of Indian Standards (BIS) have started to export cement to India while five more manufacturers have applied for certification.

Cement goes to India by sea route or train. The traders want both the governments to allow road transport as well.

According to the two governments, only a truck of 10 tonnes can cross the border. This is not viable in the case of cement.

Pakistan produces about 100,000 tonnes of cement, of which 40,000 tonnes is more than what is consumed locally. The surplus cement is exported to several countries.

Ilyas said Pakistan was exporting cement to at least 11 countries.

According to manufacturers, the capacity of the cement industry in Pakistan would touch 40 million tonnes by the end of the year and could reach 44 million tonnes in another year.

"We believe there is great demand for cement in India and importers would continue to prefer Pakistani cement, being close to their country and because of competitive rates," Khan said.

Cement export from Pakistan was proposed during a meeting between Prime Minister Manmohan Singh and Pakistan's former prime minister Shaukat Aziz in 2005.

Pakistani exporters were encouraged by the Indian government's steps to abolish countervailing duty and additional customs duty, making imports viable.