The crisis in the paper industry could lead to high prices for notebooks and a shortage of textbooks

In June, parents of in-school and college students could face two issues. First, laptop prices should reign higher. Second, they may not be able to obtain textbooks for their children and may have to make photocopies, especially those prepared under the new education policy.

In an indication of things to come, a private paper-making company announced to its dealers on Wednesday that it was raising stationery prices to ₹100 per kg plus GST.

“Exorbitant increase”

The company said it would start supplying paper from the second week of May and prices were raised due to a “massive increase in the cost of all grades of raw materials”.

He also pointed to high crude and coal prices as another reason for the rise.

“He’s just a producer. We don’t know if others will also increase it to such levels. But other manufacturers are quoting ₹70-80 per kg,” said Deepak Mital, chairman of the Federation of Paper Traders Associations of India.

A Kolkata-based paper industry analyst said prices had risen “exorbitantly” by ₹50-55 per kg before the Covid-19 pandemic took hold. “There will be low stocks of textbooks and notebooks might be out of stock. Due to the lack of these, there will be pressure to move into the digital space,” said the analyst, who n didn’t want to identify.

EU ban on export of cutting waste

Vinod Patel, managing partner of Chennai-based Suryaans Paper Mills, said the pressure on the paper will continue at least until April 14, when members of the European Union are due to meet to demand the ban. imposed by the EU on waste exports. cuttings.

“Even if the EU decides to allow slash exports, it will take time for prices to come down,” he said.

Mittal said paper prices are skyrocketing as demand outstrips supply. “Demand is strong and as a result prices have increased by 10-15% over the past two months. This has put pressure even on ‘A’ grade mills that produce paper from pulp,” he said.

The analyst said there was uncertainty over paper supply and manufacturers were unable to supply the full quantity demanded by dealers. “If I ask for 10kg, they will probably give me four kg and cannot guarantee the supply of the rest,” he said.

Risky trade

Since kraft paper manufacturers do not receive waste, used paper and old newspapers that are used to produce corrugated or brown boxes used to package everything from electronics to FMCG, there was pressure on ‘A’ grade factories.

“The problem for the paper industry is that raw material prices are rising hour by hour and old orders are not being fulfilled. This puts the trade at risk, especially to obtain funds,” the analysts said.

End users such as corrugated box manufacturers are at a crossroads as the crisis grips the paper industry. “These people can’t do anything with their customers because of the problem. They conclude a contract for a period of at least four months to supply the brown boxes. Any increase or default will lead to their being blacklisted as some of the companies, mostly multinationals, are relentless and inflexible,” the analyst said.

Crisis context

The paper industry has been crushed by the waste shortage crisis since Covid-19 took hold. The pandemic has caused people to stay away from printed newspapers and journals.

According to industry estimates, there has been a drop of at least 35% in the recirculation of old newspapers.

Additionally, China has banned the import of waste materials, including papers, which has led Chinese entrepreneurs to set up recycling units in countries like the United States. In India, kraft paper, which is used as pulp for papermaking, was exported to China, adding to the problems.

The shortage of slash has pushed their prices up to more than $400 a ton from less than $100. Skyrocketing freight costs from around $1,600-1,800 per 40-foot container to over $3,200 per ton further increased costs.

Higher crude oil prices have led to higher chemical costs, while coal used as fuel by these companies has also risen sharply.

Published on

March 24, 2022

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