Newsprint set to become dearer

Imported newsprint prices will go up by $40 a tonne for contracts to be undertaken from the next quarter. With this hike, the cost of imported newsprint will go up to $610 a tonne (for 45 grams per square metre or GSM).

Since this translates into a hike of almost Rs 1,600 a tonne in terms of the Indian rupee, domestic producers are also planning a hike in the range of Rs 1,000-1,400 a tonne.

This would be the second hike in the current year. Newsprint producers had hiked prices by Rs 500-750 a tonne in the October-December quarter.

"In the next quarter, deals will be made at a higher price. Since the cost of imported newsprint will be higher, domestic producers will also be hiking their prices. However, the level would depend on the manufacturer. With an increase in prices, our net sales realisation per tonne will be higher. This will mean an increase in revenue for the next quarter," said V D Bajaj, the executive director of Rama Newsprint and Papers (RNPL).

Currently, the average price of locally manufactured newsprint is close to Rs 25,000 a tonne, a decline of over 16 per cent from the year before. This is mainly due to cheaper newsprint imports from China.

The dip had prompted players such as Tamil Nadu Newsprint and Papers to shift completely from newsprint to the W&P (writing and printing paper) category which has turned more profitable.

The annual newsprint consumption in the country is estimated at 1.7 million tonnes. Of this, almost half is met through imports. The import duty on newsprint is 5 per cent, whereas the writing and printing paper attracts a duty of 10 per cent.

Coated paper may go up
In the writing and printing (W&P) paper category, prices are expected to remain stable as the mills are not sure whether consumers will accept a further hike in prices. Producers have been mulling a hike in coated paper prices from December.

"The international coated paper prices are firm and, therefore, we may hike the prices in this category. However, no change is expected in the uncoated paper prices," said B Hariharan, director(finance), Ballarpur Industries Limited, a domestic paper producer.