Newsprint to cost 12% more in next quarter

Newsprint prices (of the 45 gm per square metre or GSM variety) went up to Rs 38,000-40,000 a tonne from Rs 34,000-36,000 in the last quarter.

The cost of imported newsprint has also been rising steadily owing to rupee depreciation, despite a cut in customs duty from 5 per cent to 3 per cent in April. Imported newsprint is now available at around Rs 41,000 a tonne.

"Manufacturers will not earn higher margins with this price hike. The spurt in input costs have forced us to raise prices. The demand-supply situation is also supporting the increase", said V D Bajaj, executive director, Rama Newsprint and Papers.

Even as most publishers are feeling the heat of the rising newsprint costs, some are trying to optimise their revenues from advertisements to cover up the cost-push.

"We had made provisions for the possible price hike in our budget and had accordingly raised our revenue targets. So, we see no material impact on our bottomlines," said Sanjay Gupta, CEO, Jagran Prakashan, publisher of the Hindi daily Dainik Jagran.

Bajaj said the landed cost of coal rose from Rs 4,400 to Rs 5,500 a tonne in June alone. "We require 1.3 tonnes of coal to produce a tonne of newsprint. There is an input rise of Rs 1,430 a tonne from coal alone," he said. In the last week of June, the cost of waste paper and pulp went up from $240 to $290 and $720 to $770 a tonne respectively.

India's current newsprint consumption is estimated at 2 million tonnes and is expected to grow by 20 per cent to 2.4 million tonnes in another year. New publications and increase in editions and pages of existing publications are boosting demand. The country meets about half of its newsprint consumption through imports.

Printing & writing paper at record high

Companies such as Bilt, the country's largest paper maker, have hiked prices of writing and printing paper with effect from today citing pressure from rising input costs.

While coated paper price has been hiked by Rs 1,500 a tonne, uncoated paper price has been raised by Rs 800 a tonne. Coated paper is now selling at Rs 47,000 a tonne while uncoated is priced at Rs 43,500 a tonne, both record highs.

"With this increase, both prices have touched an all-time high. The main reason for the price hike is rise in costs of inputs such as pulp, chemicals and coal. As demand is still strong, we are able to pass it on to the market.

This will help the company earn better margins, provided input costs do not rise further", said B Hariharan, group finance director, Bilt.