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.
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.
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