"If you bargain hard and are willing to compromise on quality, you will get it at 6,500; otherwise, you will have to pay exactly Rs 7,000 per 1000 pieces," says Roshan Dahal, former president of Nepal Construction Materials Dealers´ Association.
The current price of bricks is more than double what it was in the same month last year. In May 2008, bricks cost Rs 3,000 per thousand pieces. And the highest price recorded in the last fiscal year was Rs 3,500 per thousand pieces, exactly half the price today.
Brick-kiln operators say the price has escalated mainly due to the damage that sudden rains have caused to their stockpiles of unbaked bricks. While the rains have decreased output, manufacturers, taking note of the increased demand for bricks in the present climate of construction boom, have increased their price.
The rise is sure to upset the budgets of commercial as well as personal constructions. Statistics furnished by the Central Bureau of Statistics (CBS) suggest that bricks account for some 12 percent of the overall construction cost, so any change in their price will accordingly affect any construction budget. The statistics further suggest that in the past, brick prices used to rise at an annual average rate of 4 to 8 percent.
"The current rise has been sharp and unprecedented," says Dahal, who adds that consumers planning to start constructing a 1,700 square feet home, for example, should brace themselves for a rise in their spending by at least a hundred thousand rupees.
Interestingly, in mid-July 2008, the government had fixed the rate for bricks supplied for civil works to Rs 2,800. This rate, approved by the district development office-- the authority that oversees the prices of construction materials at the local level-- was supposed to remain in effect throughout this fiscal year.
However, since most of the bricks supplied in the market come from the private sector, and since the private sector sets prices according to the demand-and-supply equation, rather than in deference to government directives, the price of bricks rises and falls accordingly. The price that the government quotes is normally lower than the market price because the government calculates the price of bricks from the lower quotations that are forwarded to the government by large-scale suppliers.
But that discrepancy still does not explain why bricks are so expensive today. People keeping track of prices in the market say that the price of bricks has been rising throughout the year: it´s not a one-off event.
According to retailers, in November 2008, bricks cost Rs 3,000 per thousand pieces; in January 2009, Rs 4,100; in February, Rs 5,100; in March, Rs 6,000; and finally in April, it hit the Rs 6,500 and Rs 7,000 mark.
"The price was raised at the very start of the new production season, and the very first lot distributed in the market was priced at Rs 4,100 per thousand," says Dahal.
So why has the price kept on increasing? Blame it all on the rain, scant as the showers have been. The price has jumped up every time it rains.
The always bullish brick
| Price (Rs/1,000 pieces) | |
| July, 2008 | 2,800 |
| November, 2008 | 3,000 |
| January, 2009 | 4,100 |
| February, 2009 | 5,100 |
| March, 2009 | 6,000 |
| April, 2009 | 6,500-7,000 |
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