The Hindu Business Line : Newsprint prices to go up by Rs 1,000 a tonne

FOLLOWING the footsteps of manufacturers of writing and printing paper, domestic newsprint makers have decided to raise standard newsprint prices by at least Rs 1,000 a tonne from April 2005.

The move to revise prices has been ratified by the Indian Newsprint Manufacturers Association (INMA).

An INMA source said that the average revision should have been Rs 2,000 a tonne if the entire escalation of input costs were to be neutralised.

But the manufacturers had been advised not to increase prices at one go.

Prices may be increased further after examining the impact of VAT on newsprint, to be effective also from April 1.

Contrary to the expectation that the implementation of VAT on newsprint may bring down prices, it is feared that consumers may not get the desired benefit in the event of prices being revised further.

It is pointed out that newsprint manufacturing has become capital-intensive because domestic manufacturers depend heavily on imported raw materials, de-inking chemicals, machinery and spare parts, and to some extent, coal.

There has been a 30 per cent increase in the price of all inputs in the international market during the last three months.

The source said that pulp prices in the international market rose by $50-60 a tonne, while prices of waste paper moved up from $125 to $160 a tonne.

This apart, shipping freight had increased between $30 and $50 a tonne from European ports.

Since almost all domestic producers use imported waste paper sourced from European countries, depreciation of the dollar against euros had made the situation difficult.

However, the source said that domestic newsprint would remain less costly vis-à-vis imported varieties even after the revision of prices because international operators are also revising newsprint prices by $20-30 a tonne from April.

The landed cost of newsprint at port cities would then be about Rs 30,000 a tonne and the cost at non-port cities would be about Rs 32,000 a tonne, against the average ex-mill price of domestic standard newsprint of about Rs 26,000 a tonne.

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