Comments
The Indian paper industry is in dire straits caught between global raw material shortage and rising prices of local wastepaper.
Industry sources say that the situation took a turn for the worse after demonetisation, as old paper collection is largely dealt in cash and the waste paper collection is unorganised.
Waste paper availability fell about 30 per cent, P G Mukundan, Secretary General, Indian Agro and Recycled Paper Mills Association (IARPMA) said, adding “our collection of waste paper from the domestic market is around 6 million tonnes and we import an equal quantity”.
Further, rising cost of imported waste paper has started to push the mills to source more quantities from the domestic market. The consequent increase in domestic demand has made local wastepaper more expensive forcing kraft mills to either shut or reduce production by 30-35 per cent, the IARPMA Secretary General said.
Reports reveal that the DSOCC price from US ports surged from $190 in December 2016 to $250 by end January 2017 and further to $300 in four weeks as at end February. It again rose north to $350 in four days as on March 4, 2017.
“Due to the unprecedented increase, the local waste paper prices (all grades and used in manufacture of paper for writing, printing, kraft, duplex and so on) have also started to increase steadily every two days for the last 45 days. Notwithstanding this, fuel prices have also shot up 20 25 per cent since October last,” Mukundan said, urging immediate government intervention.
“The government should intervene and streamline domestic availability through a legislation, may be even usher in some mechanism for collection; they must discourage use of paper for packaging food items/ products,” he said.
When asked if the use of paper is on the rise considering that a lot is done on electronic mode, he said “the demand for packaging material has skyrocketed in recent years; paper is used in glass-making, packing food products etc.”
On global shortage, he said “we source waste paper from Europe, the US and Middle East; but their (captive) consumption has increased significantly. And China, which is also a major importer of waste paper has started procuring in bulk; we are therefore left to fend with paper grades that are not used by either of them and we lack bargaining power.”
“The paper recovery rate (of the 15-16 tonnes consumption) is just 25 to 27 per cent. The rest goes for packing, glass making and so on.”
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.