Mumbai, March 27 -- India's cement industry is staring at an unusual supply disruption-not of limestone or coal, but of the humble cement bag. As the war in West Asia ripples through petrochemical supply chains, polypropylene (PP), the key raw material used to manufacture cement packaging bags, is turning scarce. The crunch is pushing up costs, squeezing MSME (micro, small and medium enterprises) bag makers, and adding fresh margin pressure on cement companies already grappling with higher fuel expenses. According to industry estimates, the cost of a single cement packaging bag which was Rs.6-7 until recently, has now climbed to Rs.11-12 due to a PP shortage. Due to the shortage, per tonne cost of cement will increase by roughly Rs.60-80, considering 20 bags of 50kg each per tonne, said Sourav Mitra, partner, Oil and Gas, Grant Thornton Bharat. At the heart of the issue is PP, used to produce woven cement bags. Refineries in the Gulf region are increasingly diverting feedstock such as propane and butane toward liquefied petroleum gas (LPG) production amid supply uncertainties, tightening PP availability. Bag manufacturers are currently receiving only about 60-70% of their contracted PP chip supplies, according to a Motilal Oswal report dated 18 March. Raw material costs have surged nearly 70% in the past two months. Government-led diversion of propane and butane toward LPG is expected to further constrain PP output and, in turn, bag production, said Mitra. Consequently, PP cement bags are likely to witness cost escalation of 30-40% per bag, according to Grant Thornton Bharat and Motilal Oswal estimates. At least one large cement maker said the shortage is already visible....