Cement prices defy seasonal trend, belie producers’ claims –
* COVID-19 Forced Manufacturing Capacity Down 50% —Distributor
* Prices have skyrocketed since the #EndSARS event
* Transportation, unloading, others push retail prices
* Availability determines retail price – Dealers
* Umuahia, Kano register lower prices
By Kingsley Adegboye
The price of cement rose again from July to August, contrary to the usual trend in the industry.
Vanguard’s market findings indicated that the average market price is now around N 3,800, a 31 percent increase from the May average of N 2,900.
In the first quarter of 2021, Q1’21, the price of this product considered the most essential in the housing and construction sector of the economy, had sparked huge controversies over the price games between the main competitors as the prices increased considerably.
READ ALSO: Why cement prices are rising – Dangote
Industry watchers expected that with the wave of denials, accusations and counter-charges among producers, prices would moderate downward or stabilize at the 2,900 N average.
However, the Market Trends Report indicated that in June the price had increased between 3,200 and 3,350 n. In July, the price jumped to 3,600 N and jumped again in August, now hovering around 3,800 N.
Dealers told Vanguard that the price of cement generally drops in May and remains subdued through October, explaining that there is usually a lull in construction and construction activity during the rainy season, resulting in a decrease in demand for cement.
Banjo Adekola, a cement distributor, who spoke to Vanguard, attributed the price hike to a variety of factors ranging from logistics like transport from the factory to unloading at distributors’ warehouses.
He explained that the associated costs incurred in the distribution chain are added to the actual factory price, a situation that puts pressure on the retail price.
In Taraba State, the predominant cement brand sold in all local communities is Dangote products.
Vanguard’s findings revealed that only a few distributors had other brands in their stores. The majority of those who had other brands besides Dangote products are large distributors, who unload trucks weekly.
Some other brands on sale in Jalingo, the state capital, are Ashaka Cement and Supaset.
Vanguard’s investigation also found that these other two brands are relatively cheaper than Dangote brands.
According to one of the dealers, who gave his name as bishop, the cement business is not anchored on a fixed price, noting that the availability of the product determines the price of the product.
In Taraba State, there are three major brands of Dangote cement namely Blockmaster, Falcon and 3x.
The prices of these brands also differ in the various local governments of the state. In Jalingo, the state capital, the current price of Dangote products in all stores visited ranges from 3,300 to 3,500 n.
On the Mambilla Plateau in the local government of Sardauna, the price of cement is 4000 naira. It is the same in Karim-Lamido.
One of Jalingo’s dealers who preferred anonymity, explained that cement prices at the end of last year and at the beginning of this year were between 4,000 and 4,200 n in the capital of the State.
He said that before the #EndSars protests they were selling cement products for 2,700 N but the prices after the #EndSars went from 2,700 N to 3,200 N and then to 3,500 N and 4,000 N .
In the state of Oyo, the rise in the price of cement varies from one local authority to another and from one dealer to another, which has triggered a ripple effect on popular markets, prices increasing by about 20%.
For example, in Ibadan, the capital of Oyo State, the price of Dangote cement has increased from N2,300 to N 3,500 and N3,600 (as prices vary from dealer to dealer).
Likewise, the price of Dangote cement rose to 3,500 N in August from 2,700 N at the start of this year, while the price of Lafarge cement is now between 3,300 and 3,400 N.
Confirming the development to Vanguard, Bodija market cement trader Alhaji Fasasi Aderounmu said the price of cement from Dangote is now 3,600 N.
He said the price persisted for a month. The product, he said, sold at a rate of 3,100 N and 3,300 N in early June before being increased to 3,500 and 3,600 N last month.
According to him, there was a shortage of the product on the open market, which fueled the pressure of demand.
He said, “With the high cost, resellers don’t even see the product to buy from the manufacturers. We don’t understand the situation.
“What we have learned is that there has been an increase at one of the manufacturers. I think this caused the problem.
Another dealer, Ramota Adebisi, said there had been no communication of the latest price development from manufacturers.
‘The offer is limited‘
A large Jericho distributor Ibadan Alhaji Abdulateef Agboke said middlemen often complain that they cannot get products for weeks and have to raise prices when they receive very limited quantities, not understanding that manufacturers had not increased the price.
According to him, the COVID-19 pandemic has forced manufacturers to cut production by almost half due to the delay in obtaining raw materials from abroad.
In Umuahia, Abia State, a bag of cement sells for between 3,200 and 3,300 naira.
Vanguard’s investigation revealed that a Unicem brand bag sells for N 3,200 while Dangote and Supa Set sells for N 3,300 per bag, respectively.
Exceptions to the rule
Amid the widespread complaint of upward pressure on prices, New Timber Shed Market cement manufacturer Umuahia, who simply identified himself as Mr. Chibuike, said the commodity’s price dropped slightly from what it was a few months ago.
According to him, cement previously sold between 3,400 and 3,500 n depending on the brand.
He attributed the price reduction to the rainy season, saying the price is expected to rise further as the dry season sets in.
Chibuike explained that the price of cement usually drops during the rainy season, as people do not normally embark on construction projects during the rains but wait for the dry season.
“It’s the lowest the prices can get. Very soon it will start to increase again because as Christmas approaches people will need more cement, ”he said.
Chibuike further attributed the high cost of cement to increased transportation tariffs and general information, which affected other factors of production and distribution.
In Kano, the price of a bag of cement, according to the brands, is now lower than it was in the first quarter of the year.
“The retail price of a 50 kg bag of BUA cement is 3,350 N while that of Dangote Cement is 3,300 N.
One of the cement dealers in Kano Alhaji Sanusi Mai Siminti, explained that the sale of the product is determined by its availability in the market.
He said: “The cement market doesn’t have a specific time when prices go up or down. He can go up at any time and can go down at any time.
“Usually it is determined by the supply and demand of the product. Currently, the price of a bag of cement is 3,270 N from dealers while the retail price is 3,350 N.
“This is the price of BUA cement as we get it. Dangote Cement costs 3,230 N from the depot and is sold at 3,300 N by dealers.
In Kaduna, a merchant, Mr. Ibrahim Ismail, said the price of cement is not always fixed, adding that there are always fluctuations in the prices of cement.
Commenting on the seasonal range of cement prices, he said “in general it is not seasonal, fluctuation can occur at any time”.
A vendor who aspired to anonymity said: “We sell Dangote at 3,400 N and Bua for 3,500 N. The difference is 100 N.”
As to whether she sells other brands, she said, “We sell other brands, but it depends on which one the buyers prefer. Like we have Sokoto Cement, and it’s 3,500 N also per bag.
“The market is good during the dry season. During the rainy season, it is weak.