Sri Lanka cement supplies disrupted amid price controls

Aug 16, 2011 (LBO) – Sri Lanka’s cement supplies remain disrupted amid price controls and posturing by rulers and the co-operative sector involved in another controversy, in a repetition of a similar debacle in the poultry sector. The Daily Mirror newspaper said Monday three cement firms have written to Sri Lanka’s consumer affairs agency which has imposed price controls on cement to raise prices by 35 rupees to 785 rupees a per 50 kilogram sack.

The newspaper said the firms said world market prices and raw material prices have increased.

On Tuesday the Daily FT newspaper said the authority had denied the request.

Sri Lanka’s construction industry has been hit by cement shortages in the past few weeks as world prices went up.

A ‘shortage’ happens only when prices are controlled by the state as it prevents new supplies, especially through imports coming in at higher prices to bridge supply gaps.

The price controls also automatically create a ‘black market’.

In the 1970s when Sri Lanka was a controlled economy price controls, shortages, black-markets and queues.

At the time grandstanding by rulers and officials about ‘hoarders’ and black marketers were common.

Media reports said the cons