Mumbai, Dec 4: With leading cement companies forming a cartel to create an artificial shortage and push up prices, dealers have come out strongly against the malpractices in the sector. The Cement Stockists and Dealers Association of Bombay (CSDAB) has warned that the two-fold strategy of the cement manufacturers to stop despatch from November 27 to December 4 at a national level and increase prices from current levels at regular intervals might invite action from MRTPC or consumer forums of by way of public interest litigation. Even as the Department of Company Affairs (DCA) launched a probe into the cartelisation by cement companies, the association has alleged that confirmed orders and contracts entered into in writing for delivery of cement stocks have not been adhered to and are being cancelled by some cement manufacturers. The association has said that it is the end consumer ``who is being held to ransom by the concerted action on part of the manufacturers to stop all dispatches for a week.'' It has alleged that cement which had arrived at the rail heads on or after November 27 has been taken to the respective company's godowns. Materials dispatched directly to the consumers account have also been illegally taken to the company godowns. Leading cement manufacturers - Gujarat Ambuja, Larsen & Toubro and ACC - have stopped their dispatches to Maharashtra for a week beginning November 27 to December 3. These three cement majors together account for over 60 per cent of the Mumbai market. It also refuted statements appearing in a section of the press alleging hoarding and profiteering in cement by the traders. The association has said that "hoarding of any kind is not being done and cannot be done by the trade." The reason being lack of infrastructure to store huge quantities. The press release from the association further says that most of the material is sold directly to the consumer from the delivery points (except that which is sold in retail). Dealers said that the cement trade is in no way responsible for the current state of affairs either directly or indirectly. The association has pointed out that the price increase for the month of December have already been announced by cement manufacturers. Mumbai is the country's largest cement market with a monthly consumption of three lakh tonnes. Cement manufacturers apparently decided to stop dispatches to sustain the price hike in Mumbai, and further firm up prices. Cement manufacturers have already hiked prices twice during the past week - the first one was a Rs five per bag hike and the second one was a Rs two increase. Retail prices in Mumbai are now around Rs 145 to Rs 150 per bag while dealer prices have risen to Rs 135 to Rs 140 per bag. Dealers say that the price is expected to go up by another Rs 10 in the coming week. The companies are using this as an opportunity to downsize their inventories. However, some dealers expressed the fear that the decision to stop dispatches might lead to a shortage of cement in the Mumbai market.
