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