Paper producers raise prices 5-8% on rising input costs

In India, about 40% of coated paper volumes are imported. Average annual imports stand at 5,50,000-6,00,000 tonnes

 

Paper producers have said they would raise prices five-to eight per cent due to rising input costs. While Ballarpur Industries and Tamil Nadu Newsprint and Papers have decided to implement the price rise from September 1, JK Paper has already raised the prices of most of its products.

“We have decided to raise paper prices across all varieties between five and eight per cent from September 1, partly because of a spurt in wood prices from local sources. Also, import of pulp has become costlier because of a drastic depreciation in the rupee. Therefore, we will pass on this cost push to consumers,” said Yogesh Aggarwal, managing director and chief executive, Ballarpur Industries.

Prices of wood from domestic sources have risen 10-15 per cent. Despite little movement in pulp prices in global markets, its import cost has increased in proportion to the rupee's depreciation. In July, the average price of pulp remained unchanged at $832.02, after a 1.84 per cent rise in June, according to indexmundi.com.

After hitting an all-time low of 68.8 against the dollar on Wednesday, the rupee ended at 65.7 on Friday, a fall of 10.38 per cent since July 1.

“There is a cost push that has to be passed on to consumers. Therefore, we will also raise paper prices from the first of next month,” said a Tamil Nadu Newsprint and Papers official.

JK Paper announced a price rise for three major categories of its paper segments early this week; the price rise would be extended to other categories soon. Between March and August, cost increases stood at Rs 3,500-4,000 a tonne. For specialties, the price rise was between Rs 2,600 and Rs 4,000 a tonne. For JK Paper, specialties volumes are small. In other categories, including map litho and copier, the company has announced a price rise of Rs 2,000 a tonne.

So far, prices of coated paper haven't been increased. But considering the rise in raw material costs, a rise in coated paper prices looked imminent, said a senior JK Paper official.

In India, about 40 per cent of coated paper volumes are imported. Average annual imports stand at 5,50,000-6,00,000 tonnes. “The cost impact on coated paper is slightly more than on copier paper. Some more price increase is likely in the coated paper segment in the coming months. Because of severe cost pressures, packaging boards would also see a price rise in the coming few days,” said the JK Paper official.