The second wave of the Covid pandemic has pulled down prices of Kraft paper, used in the packaging industry, by 10 per cent in last one month due to a sharp fall in demand.

The sector was limping back to normalcy after the onslaught of the pandemic last year. In fact, demand and prices started picking up in the second half of last year as the consumer goods industry focused on packaging, with concern on cleanliness taking centre stage.

However, the demand for kraft paper started weakening from late last month and prices started declining across the board.

The price of benchmark 18 bf (burst factor), which was hovering at about ₹39 per kg, has dropped down to ₹35, triggering decline in prices across the board, according to the Gujarat Paper Mills’ Association.

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Export market

Sunil Agarwal, President of the Association, said with the weak demand continuing, even the current rates are not sustainable and it is feared that prices may come down further.

The industry may not be able to tap the export market as the demand for kraft paper in foreign markets is also weak. The demand for packaging material has declined sharply since last fortnight.

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Lalit Garg, Chairman, Paper Committee of Material Recycling Association of India, said that given the low market demand from packaging companies, paper mills would be forced to reduce their prices further.

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