Commodities

Pay more for notebooks, textbooks as paper makers hike prices from June 1

Subramani Ra Mancombu | | Updated on: Jun 02, 2022

Manufacturers raise rates by up to ₹3,000 a tonne citing rising input costs

Got school- or college-going children at home? Then, you will have to pay more for notebooks from this month, while textbooks could also be costlier as private paper manufacturing companies have hiked prices.

Paper manufacturers such as Andhra Paper and Century Pulp & Paper have increased the prices of writing and printing paper—depending on their grades—from ₹1,000 to ₹3,000 a tonne with effect from today.

Geopolitical issues

One manufacturer, in his communication to traders, said the hike was being resorted to due to an increase in input costs, particularly in energy, furnace oil, chemicals and packaging expenses driven by geopolitical and logistical issues.

Another manufacturer said: “Prices of key raw materials like pulp, chemicals, coal, furnace oil and freight rates (including inland and across oceans) have skyrocketed at rates unseen in a decade or more.”  

Crude oil, chemicals and coal prices besides freight rates have increased due to the Russia-Ukraine conflict. The Ukraine war has also led to logistical issues. Ever since the war broke out on February 24, crude oil prices have been ruling over $100 a barrel leading to a slew of problems including soaring inflation. 

Currently, Brent crude oil is ruling at $116 a tonne with the European Union’s plans to cut the Russian oil supply by the end of the year further fuelling the energy commodity.

Start of school season

“The hike comes exactly when the education season has started. Manufacturers are visualising increased demand and want to capitalise on it,” said a Kolkata-based industry analyst, who did not wish to be identified. 

The season should have actually begun in February-March but due to the impact of the Covid pandemic, academic institutions are starting only now. “Exercise and textbooks are likely to be costlier,” the analyst said. 

Though the National Education Policy (NEP) is set to be introduced from this year, textbooks are yet to be published. Usually, the government buys papers for textbooks around March but this time, it has been delayed in view of the NEP introduction. 

2nd hike in 2 months

“The Centre also distributes books under the Sarva Shiksha Abhiyan. But it has not bought paper this year and it is likely that the funds under the scheme could be used for mid-day meals and other such things rather than for distributing books. The Centre could encourage reading of books electronically,” he said. 

This is the second hike in about two months. On March 23, paper manufacturers had increased the prices of writing paper to ₹100 a kg plus GST for supply from the second week of May.

Then, manufacturers pointed out a “massive increase in the cost of all raw material grades” for the hike. Printing and writing paper prices have doubled from ₹50-55 a kg before the Covid-19 pandemic set in.

PIMS

The analyst said with the Centre coming out with a paper import monitoring system (PIMS) from October 1 this year, shipments into the country will be checked and help paper manufacturers.

In the order issued on May 25, the Directorate General of Foreign Trade said importers need to submit advance information in an online system for imports and obtain an automatic registration number. Information has to be submitted within 75 days and before five days of the arrival of the consignment. 

The registration will have to include information on the bill of lading and details from the quality council of India. The PIMS is being introduced after the domestic paper industry alleged dumping of paper products in the country from abroad. 

The analyst said despite the allegations, India had become a net exporter of paper, paperboard and newsprint over the last two fiscals for the first time since Independence. According to the Indian Paper Manufacturers Association, exports were 2.86 million tonnes last fiscal against imports of 1.75 million tonnes. 

Published on June 01, 2022
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