Sand crisis in Telugu states affecting cement prices acutely

Hyderabad: The ongoing sand crisis in both the Telugu states is impacting the cement prices, which fell by Rs. 100 per bag to Rs. 250. However, consumers more particularly in Andhra Pradesh (AP) are not in a mood to celebrate this drop in cement prices, thanks to the acute shortage of sand.

The severe shortage of sand is forcing the construction activity to slow down. As a result, the drop in cement prices couldn’t boost the sales volume. It has been estimated that the average present consumption in AP is hovering at just 20,000 cement bags as against the normal consumption of over 67,000 cement bags on a daily basis. The sand shortage is also impacting the sales of bricks amid a slowdown in the construction sector.

Brick manufacturers have been forced to slash down prices to Rs. 5 a brick from Rs. 7 as they are not in a position to stock the brick soil and lack of space for inventory. Few builders are purchasing bricks on a credit basis to store for future requirements.

On the other side, steel prices across the nation are taking a beat. The steel price fell to Rs. 5,000 per tonne now from Rs. 7,000 per tonne. However, the traders attribute the reason for a steel price drop to volatility in the national market.

Andhra Pradesh Chief Minister YS Jaganmohan Reddy recently suspended sand mining in the state. The YSRCP government implemented a new sand policy from July onwards. This transition period has also further added to the shortage of sand. This is impacting major irrigation projects like Polavaram in the state, a government official said.

Earlier in June, cement manufacturers and dealers decided to cut down prices as the consumption dropped significantly. Dealers voluntarily reduced prices by Rs. 50 a bag and later the acute sand shortage has been further hammering down the cement consumption in Andhra Pradesh.