Cement price hike 'coup de grace' to housing sector

AMMAN — Increasing the price of cement added a new, unbearable challenge to the already deteriorating housing sector, stakeholders have said.

On Sunday night, Jordan's five cement factories increased the price of cement from JD38 to JD74 per tonne.

The decision to return to previous prices came to put an end to the accumulative losses of the companies over the past few years resulting from a recession that followed the closure of borders, Ministry of Trade, Industry and Supply Secretary General Yousef Shamali told The Jordan Times.

At that time, exports of cement stopped, except for small amounts to the West Bank, and the price plummeted from JD93 to JD28 per tonne, and then settled at JD35 during the past four months, according to Shamali.

The production capacity of the five companies is 8 million tonnes annually with a local demand that amounts to 4 million tonnes, the official said.

He stressed that the government will not allow the companies to unify the prices.

President of the Jordan Housing Developers Association (JHDA) Zuhair Omari denounced the "massive overnight" jump in price at a time when supply is low under the pretext of maintenance at the cement factories.

The reason behind the hike is a decision that was taken by the outgoing government in its last days to stop importing the material, Omari told The Jordan Times, adding that the former government said that the decision came to protect the national industry.

Omari said that before the decision, Jordan used to import only 3 per cent of the demand, which was not harmful to the local industry, but rather preserved a balance in the prices and enhanced competitiveness. 

He added that the hike would increase the revenues of the companies by JD5 million per month that will be paid by citizens.

The housing sector was already facing challenges that included high prices of construction materials and legislation related to land and sizes of apartment.

"The factories practise monopoly and conspire to control and unify prices," a cement dealer, who preferred to remain unnamed, said.

The dealer claimed that some of the cement factories sell large amounts of the commodity to "big" dealers without passing through the legal procedures such as tax registering, which helps those dealers to "manipulate" prices.

For his part, Consumer Protection Society President Mohammad Obeidat called for imposing a price ceiling on all factories, increased by 95 per cent.

Ali Adamat, who is building a house currently, said that he was shocked when he bought a large amount of cement at double the price.

"I would have paid JD750 instead of JD1,500 if I had bought them one day before," the citizen said, expressing confusion about what he has to do now after such an "out-of-the-blue" hike.