July 18, 2013
Cement exporters are facing tough times as shipment to India almost halved recently due to a steep fall of the rupee.
In the face of weak demand, some manufacturers have already stopped exporting to the neighbouring country, which is the only export destination for Bangladeshi cement.
The fresh blow comes after exports plunged 57.82 percent to $14.58 million year-on-year in fiscal 2012-13, according to Export Promotion Bureau.
“Our exports fell by 45-50 percent in the last couple of months,” said Alamgir Kabir, additional managing director of MI Cement Factory, a leading exporter who markets the Crown brand.
They exported 5,600 tonnes of cement last month to the Northeast states of India, compared to 9,760 tonnes in May, Kabir said.
The rupee nosedived 10 percent against the dollar just in the last two months, resulting in a surge in import cost for the Indian traders, he said.
The dollar traded at Rs 59.33 yesterday and rose as high as Rs 61.05 on July 8, from Rs 54.83 on January 1, according to Reserve Bank of India.
In contrast, the Bangladeshi currency gained against the dollar due to higher foreign exchange reserves and lower imports. The taka has advanced 2.5 percent to Tk 77.75 against the dollar since January.
“Our export price has come down by around 5 percent due to the devaluation of the Indian currency,” Kabir said.
Echoing him, Ali Bashar, managing director of Seven Circle (Bangladesh) that makes Seven Rings brand, said: “The Indian exporters are still offering the same prices they offered before the depreciation of the rupee. We can’t accept it.”
“We didn’t make any shipment last week as the offered price did not match our expectation,” he said, adding that his company usually exports 2,000 tonnes to 2,500 tonnes of cement a month.
Bashar said the trend may continue until the Indian importers adjust their local price with the depreciated value of the rupee.
However, Mostafa Kamal, chairman and managing director of Fresh Cement, said the situation is temporary.
He said non-tariff barriers such as certification and bank guarantee from the Indian part and weak infrastructure on the Bangladesh side are some impediments to cement export. Bangladesh exports 15,000-20,000 tonnes of cement a month to India.
Currently, the cement production capacity of the country is around 22 million tonnes per year, while the annual demand is around 16 million tonnes.
Source:-www.thedailystar.net
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