Dollar crisis hits construction materials
Al Amin :
Prices of almost all kinds of construction materials have increased in the local markets due to the ongoing dollar crisis, which impacted the real estate sector heavily, the industry insiders said.
Along with the price-hike of the construction materials, due to the ongoing agitation programmes like strike and blockade called by the political parties, the demand for construction materials has decreased significantly, they added.
The prices of rods (iron) may cross Tk 100,000 per tonne by the end of December this year, if the dollar shortage continues, they added.
According to the Building Materials Prices Index of Bangladesh Bureau of Statistics (BBS), the prices of the construction materials have increased by 6.62 per cent in the last month (October).
Currently, rod, key materials of the housing sector, is selling at Tk 88,000 to Tk99,000 per tonne, which was Tk 80,000 to Tk 90,000 in September.
The sector insiders said the prices of rod are increasing as the manufacturers are failing to open letters of credit (LCs) for importing raw materials due to the dollar crisis and the factories are producing less than their capacities due to the lack of raw materials.
Sheikh Masadul Alam Masud, Founding Chairman of the Bangladesh Steel Manufacturers Association, told The New Nation, “Dollar prices are increasing and we are not being able to open LCs for importing raw materials. So, it is natural that the market will be impacted by it.”
“Raw materials of the industry are fully import-dependent. As the import of raw materials has decreased, the factories are failing to produce rod as per their capacities,” he added.
He further said, “The raw material could be imported with 5 per cent margin. But the bank has now increased the margin. In addition, the capital also decreased due to the increase in prices of dollars.
As a result, the business is affected and the overall sales have declined by around 40 per cent compared to the same period last year.” The prices of rods are still stable in the market as demand falls. But, the prices of it will be increased further, when the construction works start fully, Masud added.
Along with rod, the prices of cement have also increased by Tk 20 per sack and the housing material is selling at Tk 540 to Tk 570 per sack in the local market.
Sankar Kumar Roy, Executive Director of the Bangladesh Cement Manufacturers Association, said, “Demand for cement has dropped significantly in the local market due to the price-hike. As a result, the manufacturers are now counting losses.”
“Flat prices are currently out of reach for the middle class due to the rise in the cost of rod and cement.
On the other hand, many people, especially the middle class, are afraid of starting the construction work due to the political uncertainty ahead of the national elections.
As a result, the sale has dropped unusually,” said Sazzad, owner of a vendor in Mohammadpur Area.
