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, a top official said.

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.

In Jeddah a bag of cement now costs over SR25 ($6.67) and most dealings take place through middlemen whereas in Madinah the prices of cement per bag have shot up by SR20 ($5.33), said a statement.

Subsequently, prices of ready-mix concrete shot up 30 per cent 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.

A number of ready-mix concrete factories in the Eastern Province hiked the prices of liquid cement on Wednesday, said a report in Al-Eqtisadiah business daily.

In Jeddah customers say there is adequate supply of cement but only in the black market. They can buy the required quantity through middlemen if they are ready to pay SR25 per bag or more. The order will then be delivered at their work site within 24 hours after the purchase but without an invoice.

Many customers, especially contractors and realtors, are forced to buy cement and other construction materials at a higher rate to implement their construction projects on time, the statement said.

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.

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 sq m jumped from SR200 ($53.33) to SR230 ($61.33). This was caused by a hike in the prices of cement plus increases in operational costs.”

He 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.”

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.”

Owaid Al-Jabiri, an authorised 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. – Reuters