Steel and cement companies of United Arab Emirates have urged the government to introduce custom duties on imports in order to save domestic industry and interests of local manufacturing companies. Many local manufacturers are afraid of continuously declining demand for construction materials which may result in imports glutting local markets.
Analysts have warned that the duty may result in high cost of construction and it may increase pressure on financing of the project. Chief executive officer of RAK Steel stated that the govt. move to impose duty shall discourage speculators. He said that this was not actually a pro-market decision.
Duty on the commodity used to exist earlier but it was removed in the wake of dying business activity. Experts say that volatility of prices is not good for markets. So, in current situation, duty shall be supportive for the local industry.
GM of Union Cement stated that this was the right time to impose duties. He suggested that the duty should be increased from 5% to 10%. In his opinion, it was necessity due to the fact that there is sufficient supply of locally produced semen in local markets. He added that duty was removed last time due to shortage of clinker at that time due to high costs of important clinker.