Cement shortage sparks speculation

Cement shortage sparks speculation
Updated 13 December 2012

Cement shortage sparks speculation

Cement shortage sparks speculation

Many citizens attribute the recent shortage of cement and 20 percent hike in its price to a new expatriate fees ordered by the Ministry of Labor.
There has been no arrival of cement to the Jeddah market for the last three days triggering a severe shortage of the material, which is highly in demand because of the boom in construction projects in the city. Now a bag of cement sells for SR18 as against SR 15 last week.
“The disappearance of cement from the market is a ploy of expatriate workers to find money to pay for the recent hike in expatriate fees to SR 2,400. In fact the commodity is available but only in the black market at a higher rate,” said Abdullah Al-Shahri, a Saudi who urgently needed cement to finish the construction of an apartment building.
He said he has the evidence to buttress his charge that the crisis is artificially created because he bought a truckload from a driver who offered to supply him the required quantity of cement on condition that he should pay a higher price and that the delivery would be made under the cover of darkness.
Another Saudi buyer in the market, Saleh Al-Ghamdi, agreed with Al-Shahri’s view but added that the rising price was expected as prices of most other goods have gone up following the increase of the expatriate fees.
“It is the common citizen who suffers the consequences of the ministry’s increased expatriate fees,” he said, adding that the manufacturing companies would never bear the burden of the new fees but pass on to the consumers who have already started sensing it in the market.
On the other hand, Chairman of the Contractors’ Committee at the Jeddah Chamber of Commerce and Industry Abdullah Ridwan did not believe that there was any connection between the recent rise in expatriate fees and the current spurt in prices.
“The cement shortage is because of the higher demand and lower supply of the commodity in the market. Trucks have been waiting for load cement at factory gates for several days,” he said.
A source at the Ministry of Commerce and Industry said the latest cement crisis in Jeddah is because some production lines of a company that used to supply to the Jeddah market have been closed.
The source added that the ministry demanded cement companies to increase production and supply the needs of Jeddah while the ministry is monitoring the market and arresting black marketers.
According to company sources, the shortage in the market would be short and caused by the time gap between the manufacturing at the factory and delivery in the market.
Cement salesmen in Jeddah said the interruption in the cement supply was because of a disagreement between workers and company managers.