Cement costs possibility going up as port congestion delays clinker shipments in Ghana – Life Pulse Daily

Cement Prices Could Rise as Port Congestion Delays Clinker Shipments in Ghana

Introduction

Ghana’s cement industry faces a potential price hike as port congestion continues to delay the unloading of clinker, a vital raw material for cement production. Industry leaders warn that mounting demurrage costs from vessels waiting up to 20 days to berth could eventually be passed on to consumers if urgent action isn’t taken. This article explores the causes, impacts, and possible solutions to this growing challenge.

Key Points

– Port congestion in Ghana is delaying clinker shipments, a key ingredient in cement production.
– Vessels are waiting up to 20 days to berth, leading to escalating demurrage costs.
– Industry stakeholders warn that higher costs may be passed on to consumers.
– The government is expediting dredging works to increase port capacity and reduce delays.
– Cement manufacturers are calling for urgent action to prevent further price increases.

Background

Clinker is a crucial component in cement manufacturing, and its timely delivery is essential for maintaining stable production and pricing. Ghana’s ports have been experiencing significant congestion, with vessels carrying clinker waiting for extended periods before they can unload. This bottleneck has created financial strain for cement producers, who face mounting demurrage fees for every day their shipments are delayed.

The issue was recently addressed at an emergency meeting convened by the Minister for Trade, Agribusiness and Industry, Elizabeth Ofosu-Adjare, in collaboration with the Minister for Transport, Joseph Bukari Nikpe. Representatives from cement companies and key stakeholders gathered to discuss operational bottlenecks that have left clinker shipments stranded at the ports for two to three weeks.

Analysis

The current port congestion is not only disrupting the supply chain but also threatening the affordability of cement in Ghana. Bishop Dr. George Dawson-Ahmoah, CEO of the Chamber of Cement Manufacturers Ghana (COCMAG), described the situation as “dire,” noting that the industry is financially “leaking” due to mounting demurrage fees. He warned that prolonged vessel delays will drive up costs, with the possibility of higher cement prices for consumers if the congestion continues.

The government has acknowledged the urgency of the situation. Minister Nikpe assured stakeholders that dredging works are being expedited to expand berth capacity and accommodate larger vessels. “Once the dredging is completed by the end of June, the port will handle vessels over 20,000 tonnes, compared to the current 8,000-tonne capacity, which will significantly reduce traffic and waiting times,” he stated. Partial relief is expected within one to two weeks as works around Berth 14 are finalized.

Mrs. Ofosu-Adjare emphasized that port inefficiencies directly increase production costs, which can translate into higher cement prices. “If we want good prices, we must also perform our part of the bargain to ensure that production costs remain efficient,” she said.

Kofi Nsiah-Poku, President of the Association of Ghana Industries, praised the Ministers’ proactive approach but cautioned that until dredging and interim measures fully take effect, continued congestion could place upward pressure on cement prices for consumers.

Practical Advice

– **For Consumers:** Monitor cement prices and consider bulk purchases if possible, as prices may rise in the coming months.
– **For Industry Stakeholders:** Collaborate with government agencies to streamline port operations and reduce delays.
– **For Policymakers:** Expedite infrastructure improvements and consider temporary measures to alleviate port congestion.

FAQ

**Q: Why are cement prices expected to rise in Ghana?**
A: Cement prices may rise due to port congestion delaying clinker shipments, leading to higher demurrage costs that could be passed on to consumers.

**Q: What is being done to address the port congestion?**
A: The government is expediting dredging works to expand berth capacity and reduce vessel waiting times. Partial relief is expected within one to two weeks.

**Q: How long will vessels wait to berth at Ghanaian ports?**
A: Currently, vessels are waiting up to 20 days to berth, causing significant delays and financial strain for cement producers.

**Q: What is clinker, and why is it important?**
A: Clinker is a key raw material in cement production. Delays in its delivery can disrupt cement manufacturing and lead to price increases.

Conclusion

The ongoing port congestion in Ghana poses a significant threat to the cement industry and consumers alike. While the government is taking steps to address the issue, the situation remains critical. Stakeholders must work together to implement both short-term and long-term solutions to ensure the stability of cement prices and the efficiency of the supply chain. As the situation evolves, continued monitoring and proactive measures will be essential to mitigate the impact on the industry and the broader economy.

Sources

– Life Pulse Daily
– MyJoyOnline.com