(MENAFN - Arab News) A cement crisis resulting from illegal trading and a steep hike in prices is spreading from Jeddah and Madinah to other major cities and regions in the Kingdom.
In Jeddah a bag of cement now costs over SR25 and most dealings take place through middlemen whereas in Madinah the prices of cement per bag have shot up by SR20.
Subsequently, prices of ready-mix concrete shot up 30 percent in Jeddah and other parts of the western region. Ready-mix concrete manufacturers attributed the steep hike in prices to a five-week long crisis in cement supply. According to a report in Al-Eqtisadiah business daily, a number of ready-mix concrete factories in the Eastern Province hiked the prices of liquid cement Wednesday.
In Jeddah consumers say that there is adequate supply of cement but only in the black market. Consumers can buy the required quantity through middlemen if they are ready to pay SR25 per bag or more. They can have it delivered at their work site within 24 hours after the purchase but don't expect an invoice. Many consumers, especially contractors and realtors, are forced to buy cement and other construction materials at a higher rate to implement their construction projects on time.
Manufacturers of ready-mix concrete have sought the urgent intervention of authorities to make available an adequate supply of cement and solve the shortages experienced by the construction industry. Abdullah Ridwan, chairman of the committee for contractors and ready-mix concrete at the Jeddah Chamber of Commerce and Industry, urged the authorities to intervene and make available an adequate quantity of cement in the local market to contain the soaring prices. He also called for restricting the export of cement.
Ridwan said ready-mix concrete manufactures are forced to raise the prices of the product due to increase in the prices of cement and operational costs. "Prices of ready-mix concrete per square meter jumped from SR200 to SR230. This was caused by a hike in the prices of cement plus increases in operational costs," he said.
Ridwan said there is an acute shortage of cement in the local market. "We are unable to meet the increased demand for ready-mix concrete from the construction sector," he said.
Muhammad Al-Zahrani, a consumer, blamed some leading cement dealers for the flourishing black market in Jeddah. "There are some dealers who make available the required quantity of cement at a higher rate than market prices with a condition that there will not be any invoice for the purchase. These transactions take place in broad daylight," he said, lamenting the absence of any monitoring by Ministry of Commerce inspectors.
Two days ago, Owaid Al-Jabiri, an authorized distributor of cement in the western region, said there were about 1,500 trucks stuck on the premises of a cement factory in the western region. "Hundreds of trucks reach the factory on a daily basis. Their number rose to about 1,500 as the crisis continues unabated for the 15th day on Sunday," he said, while blaming inaction from the local authorities for aggravating the crisis.