Forex shortage pushes up local cement prices
Consumers are being forced to pay about K19 000 per 50 kilogramme (kg) bag of cement, which is K7 000 above the recommended average price due to shortage of the commodity on the market attributed to foreign exchange scarcity.
In a statement issued yesterday, Ministry of Trade and Industry said following their engagement with the local manufacturers, it was found that the undersupply on the market is due to halted production caused by lack of foreign exchange for importation of key raw materials.
Reads the statement in part: “Among other reasons, the manufacturers indicated that the main cause has been limited access to forex, which has affected the importation of gypsum, clinker and coal.
“The ministry has in this regard engaged the Reserve Bank of Malawi [RBM] to prioritise supply of forex to the cement manufacturers to address the problem.”
Published data from the ministry shows that Shayona Cement Corporation’s Build Plast costs K9 500, Akshar costs K10 793 while Thanthwe costs K11 566.
For Cement Products Limited (CPL), Nkope fetches K10 252, Njati costs K11 417while Njati Extra fetches K12 465 per 50 kg bag.
On the part of Portland Cement, Khoma costs about K9 000, Duracrete fetches K14 000 while Superset is pegged at K15 000.
The ministry says given the ex-factory process of cement confirmed by the manufactures, government does not expect price of any type of cement to exceed K16 000.
However, a random survey shows that some consumers in Ntcheu District are buying a bag of cement at 20 000 while in some parts of Lilongwe, the same bag is costing about K18 000 whereas in Blantyre, a bag is selling at K19 000, with some shops rationing to a maximum of 20 bags per customer.
In an interview last week, Minister of Trade and Industry Simplex Chithyola Banda said officials from his ministry will be inspecting the retail markets and any trader found offering exploitative prices will face consequences.
Meanwhile, Shayona Cement Corporation, CPL and Portland Cement Malawi remain the only producers of cement in Malawi.
However, only Shayona Cement Corporation and Cement Products Limited are currently using locally mined limestone and iron ore to produce cement.
But CPL chairperson Aslam Gaffar said last week that their machines, which produce 1 000 tonnes of cement every day, had a breakdown.
Consumers Association of Malawi executive director John Kapito blamed lack of enforcement by the Ministry of Trade and Industry for the exploitative cement prices being offered on the market.
Construction experts say the continued shortage of cement, which is a critical ingredient in the construction sector, could have a negative impact on the construction industry and the overall economic growth.
