What Cement Can Learn from Energy & Agriculture
Cement pricing is behind the curve. Here’s how other sectors use swaps and benchmarks, and what we can borrow.
1 Feb 2025
Cement is a global commodity, but when it comes to pricing, it’s years behind other markets.
Energy and agriculture have long embraced index-linked contracts and swaps to manage risk and smooth volatility. These tools haven’t just made pricing fairer, they’ve made entire sectors more efficient.
It’s time cement caught up.
What Energy Gets Right
Crude oil, natural gas, and electricity are priced using widely accepted benchmarks. Buyers and sellers agree to use these indices, with contracts adjusted for location or delivery type.
Once indexed, it becomes easy to layer on a swap, locking in price certainty without disrupting supply.
This helps energy companies avoid budget shocks and protect investment decisions.
What Agriculture Gets Right
Farmers and food producers face seasonal, weather-driven volatility. They use price benchmarks (like CBOT wheat or soy) and hedge future prices with swaps or futures.
It gives them more control, and helps buyers secure long-term supply.
What Cement Can Learn
Use indices to create transparency.
Build standardised contracts for repeat trades.
Introduce swaps to offer protection, without changing how cement is delivered.
The foundation is already there: we have benchmarks like Platts FOB Turkey. What’s missing is widespread adoption, and a mindset shift.
Conclusion:
Other sectors don’t see pricing tools as optional, they see them as essential.
If cement wants to grow up, it needs to borrow the playbook.