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Friday, Oct 10, 2003

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Price increase in paper varieties in the offing

Badal Sanyal

Kolkata , Oct. 9

A MODERATE price increase in all varieties of writing and printing paper is in the offing.

An Indian Paper Manufacturers Association (IMPA) source - the association looks after the interest of integrated large mills — said the revision would be between Rs 1,000 and Rs 1,200 per tonne with effect from November, depending on the grades of paper.

However, he did not describe the proposed price revision as a "hike" or "increase". Rather, he preferred to call it a correction in the process gradually to reach the peak price period that had prevailed about two years ago.

Asked whether any price revision would be absorbed by the market, the source said the price of paper market throughout the country had remained stable for quite some time, and there was no adequate inventory with the mills or dealers. In fact, he confirmed that almost a zero demand and supply situation would develop around next month with the higher demand of paper due to the Assembly elections in four States.

On the other hand, a source close to the Indian Newsprint Manufacturers Association (INMA) said that domestic new print manufacturers would wait for two months more to effect a price increase on an average of Rs 1,000 per tonne from January.

Paper trade sources say that domestic paper manufacturers using imported paper pulp have reasons to revise their finished paper prices because pulp prices at the international market recently increased on an average by $ 150 per tonne. The trade sources feel domestic paper mills across the board will now take the advantage in the absence of any regulatory authority for the industry.

However, they argue that the Government should immediate bring down import duty on paper and paperboard to the WTO bound level, thereby facilitating the increased entry of cheap imported paper in the domestic market. In the process, consumers will be gainer they feel.

However, the IMPA source confirmed that the country would face severe shortage of paper after a few years because no fresh additional manufacturing capacity was being added due to the non-availability of adequate quantity of forest raw material and also due to very meagre ratio between invest and return.

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