Lahore  -    The export of cement from the country has registered a positive growth despite multiple challenges in India and Afghanistan markets, as the cement exports witnessed an increase of about 56 percent, in terms of quantity, to 5.18 million tons during first three quarters of FY19 against 3.34 million tons of the same period of FY18, leading to un ultimate drop in country’s merchandise trade deficit by 13 percent.

According to the data of Pakistan Bureau of Statistics (PBS) and All Pakistan Cement Manufacturers Association (APCMA), despite deteriorating cement export situation to Afghanistan as well as India, especially through Wagha border, Pakistan’s cement export value and volume rose during first eight months of the current FY 2018-2019, as the industry earned foreign exchange revenues of $205.86 million by exporting 4.83 million tons of cement and clinker during the eight months 2019, compared to $149.71 million at 2.98 million tons in the same period last year.

This translates an annual growth of 37.5 percent in terms of value in a dollar and 62 percent in terms of volume, respectively. In terms of Pakistani rupees, the exports advanced 69.3 percent YoY during this period to Rs27.04 billion. However, the value in US dollars fell from $50.18/t to $42.61/t in the reporting period.

According to industry experts, the exports have been shifting from Afghanistan with Pakistani producers shipping to other countries. Moreover, there is also a shift from cement to clinker as Pakistan gains the upper hand in terms of competition between clinker-exporting countries. Growth in exports is being reported with each passing month.

The exports were recorded at $221,258 million during July-March 2018-19, as against the export of $166,597 million during July-March 2017-18. However, on a year-on-year basis, the cement exports witnessed a decrease of 8.83pc during the month of March 2019 as compared to the same month of last year. The cement exports from the country during March 2019 were recorded at $ 15.392 million, as against the export of $16.882 million in March 2018.

Experts point out that Pakistani cement in Afghanistan is no longer finding market access as much as it used to. Until 2006 Afghanistan was Pakistan’s only cement export market. While exports to other markets became a reality, the share of Afghanistan in Pakistan’s total cement exports remained high. At their peak, exports to Afghanistan were 55 percent of all cement exports in 2012. This share started moving south as other African and Asian markets opened up, and moreover, Afghanistan opened doors to cement imported by other countries, including Iran.

The other interesting market was India, which has never exactly granted game-changing market access to Pakistani cement. Even so, Pakistan has been selling over 0.5Mt of cement since 2008 which climbed to 1.2Mt in 2017 and 2018. This cement was going mainly to markets like Amritsar or Mumbai, where Pakistani cement is 10 percent cheaper. However, it is unlikely that after the recent political pressures, which ultimately impact economic relations, Pakistani cement will continue to find a market in India. Even if cement can reach some markets through the border, the 200 percent duty on Pakistani goods will make them entirely unviable.