A much-awaited jump in demand, and deliberate lower production levels and despatches by industry have contributed to the rise, say experts.

Retail prices of cement have at last started the journey northwards and the April price realisation has been the highest in recent months, although it is yet to catch up with the April 1997 levels.

The average retail prices in Delhi shot up to Rs 136 per bag in April from Rs 127 per bag the previous month. In fact, the prices have been on the up during the last few months, and the industry is optimistic that the trend will continue for sometime. The rise in Delhi cement prices has been gradual from Rs 122 in January this year to Rs 126 per bag in February and to Rs 127 per bag in March.

In Mumbai,the average retail price for a 50-kg bag of cement is ruling around Rs 151, marginally higher than the March prices of Rs 145 per bag. Even in Calcutta, the cement is selling at Rs 133 per bag, higher than the previous month's level of Rs 127.

But despite the northward movement, prices are yet to catch up with last April prices. During April last year, cement in Delhi was selling at Rs 140 per bag, while the prices in Calcutta were in the region of Rs 137 per bag. Even Mumbai prices of Rs 166 per bag last April was much higher than the current prices of Rs 151 per bag.

"Cement prices have finally started to pick up, and with the budget round the corner we are confident that the trend will continue, given the policy initiatives expected for the infrastructure sector," say industry sources.

Apart from the marginal growth in demand, the April prices have been particularly buoyant, thanks to lower production and despatches. According to data maintained by the Cement Manufacturers' Association, the industryproduced 5.72 million tonnes of cement in April, as against 7.81 million tonnes the previous month. Even despatches at 5.85 million tonnes was far lower than the March despatches of 7.81 million tonnes. The April figures, however, do not include the production and despatches by Larsen & Toubro, now the country's largest cement producer.

Although the upward price trend is visible in the southern markets as well, Chennai was the only metro to have recorded a marginal dip in prices to Rs 139 per bag in April, from Rs 143 per bag in March. Cement prices at Chennai were even higher in January and February at Rs 156 and Rs 144 respectively.

Among the major cities, the price realisation of cement has been the highest in Bangalore. During April, retail cement prices were hovering in the region of Rs 152, slightly higher than the previous month's realisation of Rs 149 per bag.

Traditionally the average price realisation has been quite low in Hyderabad, and the retail prices are hovering around Rs 116, althoughhigher than the March price of Rs 107.