By Francis Akinnodi

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Market forces of demand and supply of cement and government’s intervention have led to the crash in the price of the product in recent times, The Hope investigation revealed.

The cement market, in the last couple of weeks, has seen a significant turnaround with prices tumbling from between N10,000 and N15,000 per 50kg bag to between N7,500 and N8,500.

The sudden rise in the prices of cement and other major building materials in February this year introduced upsets in the construction industry, especially in real estate, where many developers were forced to abandon building sites.

A recent market survey conducted by The Hope across Ondo State confirmed a price drop, ranging between N7,500 and N8,500 per bag, though BUA cement is selling for N7,500 to N8,500 per 50kg bag, depending on location.

Both retailers and major distributors who spoke to newsmen explained that the price drop is due to low demand and government’s intervention. At the peak of the price hike, the federal government called a meeting with major producers where it was agreed that a bag of cement should sell for N7,000 to N8,000, depending on location.

But the producers did not comply with this agreement immediately. “Nigerians stopped demanding for cement; many project sites were abandoned as developers sat back and waited for the prices to come down. So, what has happened is an inter-play of demand and supply with price responding which is Economics at work,” a cement dealer, Fagbami Bolawa said.

In the Akure, the Ondo State capital, a 50-kg bag of Dangote cement now sells for between N7,500 and N8,000, while BUA cement sells for between N7,500 and N8,500, down from between N11,000 and N12,000 respectively.

A dealer, told our reporter that what has happened is a crash from the January price, attributing the crash to low demand and stronger naira.

“The current price of the product is between N7,500 and N8,500 per 50kg bag, depending on the brand and location. This is a significant drop from the average of N12,000 which most dealers were selling in February and March.”

A dealer in Ondo area of the state who identified himself as Yemi Olateju, said that sales are picking up due to the drop in price.

He recalled that Nigerians at a point stopped buying due to the high price of the product at N15,000 per bag. “I am sure most dealers ran at a loss then because we had mainly old stocks which we wanted to offload quickly,”

Olateju noted that “because the naira is now doing well against the dollar, it will be unreasonable for manufacturers to continue to sell the product at the old prices. I also believe that the federal government’s intervention and the threat to license more importers may have worked, leading to the reduction in price.”

The Hope reports that the prices of other building materials, especially iron rods, have also dropped considerably.

Sundry market observers are optimistic of further price reductions, but they remain cautious as manufacturers, wholesalers, and retailers continue to play critical roles in setting prices for end-users.

They lament, however, that despite Nigeria’s status as one of the largest producers of cement in Africa, the price of the product continues to rise, particularly in the face of high inflation impacting the building materials market generally.

Meanwhile, Group Executive Director of BUA Group, Kabir Rabiu in an interview on a national television programme monitored by The Hope, emphasized the commitment of manufacturers to prioritize the needs of Nigerian consumers, stressing the importance of addressing the role of middlemen in the pricing equation.