I write about one month back that current market scenario related to price is not good. But now a days , position of price getting worse then ever. In clear terms it is a price war specially in 14/16 bf waste base semi-kraft paper. For example, If any mill decreases it's rate by 0.50 paise per kg., the very next day, other mills also slashes rates by .60-.75 paise per Kg. This in turns becomes a vicious circle.

Now a days a typical situation is seen in the Paper market. Paper mills shut down for their demand of rate increase on the other hand consumers are not interested in buying even in old rates. They are badly suffer from labour problem while paper mills who are affected some time back by power cut, feel relief as power position get better now a days.
In my personal view mills should not resist on rates, they sell their products as per market demand.

I would like to draw your attention about a new trade practice adopted by paper mills. They select a dealer or two and giving him a discount of Rs.1/= or in some cases up to 1.50 along with a extended credit period and told rest of the dealers much higher rates then these dealers. Their submission in this regard is that they lift higher quantity then normally dealers do. Some mill offer trip to Singapore / abroad to these dealers as extra advantage. Even some mills do it in some very personal relationship.

Today mill owners are happy that their decision is very good but they are not understanding the fact that:

1. Small & medium dealers are ruined slowly by these dealers in a span of time.


2. After some time these big dealers will dictate mills. They pay as per their desire, they give rate as their wish, even they intercept mill's production or quality matters.


3. The fore most factor is that these dealers generally sold the material by their salesman & not checking the credit worthiness of most of the buyers, they make outstanding in crores to a single party or even giving material to a defaulter, because they have to lift huge quantity . When their money in not coming back in time or fully, how will they give committed payment to the mill.

Mills should think twice or even thrice, because time will not give chance to think again.

after a long gap I once again think to express my feelings about current situation in paper market. In last one month rate of paper are gone down, they even go very steeply but Govt's Electricity Departments save paper mills as they are not giving electricity more then 10-11 hour in a day. However some mills having their own power genration but not all.
Today once again paper mill owners sit together and plan to increase Rs.2/= per kg. this is in my opinion not a right time to increase because like mills, convertors are also sufferer of electricity and their major problem is labour shortage. Also they have not much orders to supply. Mills should decide wisely & convertors / delaers should not make panic buying. Even mills should think that in feb. / march they said that waste paper prices are too high and they are forced to increase. But now a days waste is very cheap in comparision to feb./march. Dealer is selling paper even lower rate then he puchase only to rotate his circle.

Only 2 days after lifting the ban on puchases, market slasheded steeply. Few day back where mills who were demanding 6 to 7 rs. per kg increase & telling that they have already booked for whole april have suddenly changed their attitude. Today they call 4-5 times in a day & demands for order with a increase of 5 rs. or even lesser which is a very dramatic scene.
It is also not good of our buyers (convertor), who fought for their rate increase a long way and now this news may undo their efforts.

yesterday most awaited decision was taken by NIKDA. All member present nominate NIKDA Executive body as under:
Sh Suresh Chand jain will be Chairman of the Association, sh Mukesh Gupta will be President , sh. Akhil Gupta will be Secretary & sh. Ram Babu Goel will be Treasurer. Subscription of the association will be 5100/- per member.
Soon constitution of this body get prepared & then we will register it.

Today, at 12 p.m. Northern India Kraft paper Dealers' Association has arranged a meeting to review the position of Market.

In my opinion NIKDA should open the ban on purchases as most of the mills or say their associations came to a realization that a decorum of rate will be maintained.

Apart from this it is high time to nominate the executive body of this forum for the further smooth working.

Meeting of North India Kraft paper Dealers Association (NIKDA) was held yesterday and once again dealers stick to their decision "no new purchase till 12-04-2010". The unity and bonding is very good. More then 100 dealers joined the forum and agreed that it is essential in the interest of trade to close/stop all purchases.
Although in my opinion under present rate increase scenario, market is flooded with material because dealers & converters, both made panic purchase. They purchased much more quantity then they required. This would help mill owners to increase prices further. But now dealer & converter, have started feeling the shortage of space as well as finance at some places. Converters are not in a position to repay as per agreed terms because they bought excess material then they required, besides due to closing of financial year there is already a financial crunch.
But I firmly believe that this decision is very much beneficial for the PAPER TRADE.

Today we are talking about current senerion of paper prices. While it appears that paper prices have leap frogged, but if one looks at the situation in greater depth, one would realize that it is only a function of dramatic cost increases, especially in pulp and fibre.

I would like to inform you that current uncoated prices of USD 1000 FOB translating into USD 1050 CIF on average, is roughly equal to the long fibre price as on date. There is no long fibre available less than USD 980-1000, while hardwood pulp is at USD 825-850. Normally, to sustain paper business, the spread between Pulp and Paper price needs to be anything like USD 250-300.

Keeping in view the factors such as strike in Scandinavia, wet weather in US/Canada, Chile earthquake ,NGO movements protecting forests, withdrawal of black liquor credit to pulp mills in the US, energy prices, freight rates and other general inflationary pressures and this is not only in international market the situation in our domestic market is also worst i.e. increased prices of local waste paper, hike in petrol / diesal / wheat straw / baggas prices and not only increse non availabilty is alos a big factor.It seems that fibre will remain stiff in the near/medium term.

Paper companies including distributors have been bleeding in the recent past, this needs to be explained to consumers. It is in the ultimate interest of consumers/ market/ industry that everyone makes a reasonable margin and industry attracts fresh investments for capacity and modernisation. We do understand the consumers backlash in such a situation, however, you would have noticed imported paper price to have shown more radical change than domestic players. Most of the Pulp/Paper Mills around the world are fully booked till end May/ early June.

This letter is to update you with some of the latest happenings around the industry and hope that you find it useful in explaining to the consumers the rationale behind the recent price movements.

From today Duplex manufacturer started charging VAT @ 4% in place of 12.5% (in Uttar Pradesh)as in the past.
It is very confusing decision as if they follow the decision of Khanna Paper Agency’s appeal (which was decided on 03-06-09) then till now why they are charging 12.5%?
If commercial tax department raise demand against this difference of tax then who will be liable for tax as well as for interest & penalty? Manufacturer or Dealer or Converter?

Yesterday Kraft paper mills of north India called a meeting and inform some dealer to join them. Most of the dealers refused to attend the meeting. But it is very unfortunate that out of us 7-8 dealers joined them. Again mill owners dictate us that they will give us material up to 15-4-10 with an increase of 5/= per kg. and afterward on increase of 6/= per kg.
Now I wish to question all of us that when previously they committed to give us 21% of the material in April at increase of Rs. 3/= & afterwards up to 31-5-10 they’ll give us the material at increase of Rs. 5/= then why do we even think/consider any such offer. If they don't fulfill their previous commitment then how can we rely on them?

Yesterday Paper Trade witnessed a making of history . Most of the kraft paper dealer of North India gathered and sit together for the benefit of paper trade. They formed a new forum called "NORTHEREN INDIA KRAFT PAPER DEALERS ASSOCIATION". Dealers from all areas like- Noida, Ghaziabad, Aligarh, Moradabad, Kanpur, Faridabad, Gurgaon, Jaipur and obviously from Delhi joined the forum. Forum discussed various problems which were faced by dealer now a days.The major problem was non stability in paper prices or not fulfillment of commitments by some paper mills. as a result of 3 hour long discussion forum decided to close their purchases up to 10-04-2010. no new sizes will be given to paper mills only already given order will be entertained. forum will review it's status on 03-04-2010 and again sit together on 10-04-2010 to decide future action.

In past few weeks we have seen a steep rise in paper prices. The reason Given by manufacturers as off now is increase in their raw material specially Paper Waste.