The Hindu Business Line : Printing, writing paper prices may go up

PRICES of printing and writing paper are set to increase by about Rs 500 a tonne from May. The large mills are contemplating this increase against the backdrop of increase in raw material prices, according to industry sources.

However, the increase does not represent higher profits for the paper companies that are facing spiralling costs of raw materials including pulp, agro-waste and recycled paper, according to the sources.

Prices range around Rs 36,000-40,000 for printing and writing paper and Rs 22,000-25,000 for newsprint.

The hike this year is different from that effected during 2002-03 when the repeated increase in prices meant better realisation. The mills were then coming out of an extended slump and the two or three hikes effected that year offered an opportunity to recoup their losses.

Margins were higher and the benefits also came from a tight rein on expenditure and lowering costs of production.

This heady period was followed by a relative calm when prices stagnated during 2003-04, when token increases in listed prices were only offset by discounts.

Effectively, the increase this year will only mean that the industry will do away with the discounts. Demand will, however, be sustained as it is linked directly to growth in GDP. There is no cause for complaint on this front.

The export situation is relatively brighter, according to the sources. Prices have increased by about $50 in the last two or three months.

The increasing value of rupee has benefited the buyers overseas. Export volumes are growing and the trend is expected to hold.

Exports also help to deflate inventories in the domestic market and buoy up prices.

The demand in the US is increasing, this is an election year across the globe - citizens in 70 countries will elect their leaders — and all this is spurring the demand for paper abroad.

Newsprint prices had also increased after an extended stagnation. Prices had increased by about Rs 1,000 a tonne.

More Stories on : Paper | rd & Newsprint

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page