Newsprint makers raise prices by 7-8%

Foreign suppliers, which meet half of domestic newsprint demand, have also increased prices.

Newsprint producers have decided to raise prices by seven-eight per cent, or around Rs 2,000 a tonne for the 45 gm per square metre or GSM variety, for the quarter beginning July 1.

This is the second price rise in the current financial year. In the last quarter, the producers had effected a similar increase. The foreign suppliers, which meet half of domestic newsprint demand, have also hiked prices by $50 a tonne to $660. Domestic newsprint is selling at Rs 28,500-29,500 a tonne.

“Raw material prices have been rising and the increase that mills effected in the last quarter did not cover the input cost jump. After this increase, we should be able to make reasonable margin if waste paper prices do not rise further,” said P S Patwari, executive director, Emami Paper Mills. The company has a newsprint capacity of 150,000 tonnes and is the biggest domestic producer.

R K Agarwal, chief financial officer of Dainik Jagran group, a major publication group, confirmed that the suppliers had raised prices. He, however, added that the company was in a comfortable situation and not mulling an increase in advertising rates following the increase in newsprint prices.

V D Bajaj, executive director, Rama Newsprint and Paper, which produces 144,000 tonnes newsprint annually, said the current cost of waste paper, which accounts for 60-65 per cent of input cost, is higher than what it was when newsprint was selling above $900 a tonne.

“We need 1.3 tonne of waste paper to produce every tonne of newsprint. Waste paper price has moved from $150-180 a tonne three quarters ago to $250-280 a tonne. This newsprint price increase is not sufficient,” Bajaj said. Prices of other input like coal and cost of transportation has also moved up.

Domestic newsprint consumption is currently estimated at 2 million tonnes and is growing.

About half of the country’s consumption is met through imports on which there is no duty. The government had brought down the import duty to nil in February 2009 when newsprint prices were at a high of $800-850 a tonne to provide relief to publications.