Rising cement prices

Rising cement prices

What people have been expecting since the increase in cement prices last year has now become reality. The local benchmark prices for cement as of March 31 have been officially raised by a range of 18.56 percent in Kupang to 50.28 percent in Fak-Fak. According to the secretary of the Directorate General of Internal Trade, of the Ministry of Trade, this price increase for Portland Type-1 cement is intended to induce producers to expand their plants or build new factories.

Because the new benchmark prices have already been set, what we would like to discuss on this occasion is whether those new prices will actually be effective. We would like to underscore this point because the possibility cannot be ignored that the new benchmark prices -- which are merely legalization of the actual market prices that have prevailed since last year -- will be used as a precedent for raising prices even higher. As long as the cement trade remains controlled, a truly effective control mechanism should be devised.

We regard the creation of an effective mechanism important because cement prices that are not stable will upset construction industry calculations. Higher cement prices will also affect the rate of inflation.

-- Suara Karya, Jakarta