Over the next weekend, cement companies are likely to raise prices in South India by nearly Rs 25 per bag, people in the know have told CNBC-TV18. It is noteworthy that in the last couple of weeks prices have been increased by anything between Rs 30 to Rs 50, depending on the region, grade of cement as well and who is the producer. In other words, this is an ongoing process.

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The key reason for this price increase is that input costs have spiked up because of the coal shortage. Along with this, diesel costs are on the boil too. Cement makers are also waiting for the monsoon to get over.

India's cement production in the past five months has jumped 44 percent on a year-on-year basis and two percent as compared to the pre-pandemic April-September 2019 period, to 142 million tonnes (MT), according to a report by rating agency ICRA. The agency expects the pan-India cement production to be up by around 12 per cent to 332 MT in the current financial year and 358 MT in 2022-23.

ICRA expects the industry utilisation levels to remain at moderate levels of 62-64 per cent during 2021-22 and 2022-23, due to the capacity additions. Overall, in the first half of 2021-22, the cement prices were higher by four per cent y-o-y. "This is primarily driven by the increase in input costs power & fuel and freight expenses over the past few months," it said.

(Edited by : Abhishek Jha)