Paper Imports: a ‘Demand-Supply’ Cycle

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Browse the exclusive views of Federation of Paper Traders Association and Indian Paper Manufacturers Association about bulk imports of papers in India.

Paper Imports: a ‘Demand-Supply’ Cycle

New Delhi: The rising import of paper to Indian market has become the ‘bone of contention’ for Government of India.Paper consumption is creating a huge demand in market up to 7-8% per annum. Domestic capacities are not fair enough to meet this growing demand unless paper traders import the paper. The ‘Anti-dumping Duty and safeguard’provisions have two different prospective from the point of view of Paper manufactures and Paper Traders. Government should take the decision before justifying the demand-supply cycle of paper.

According to the president of Federation of Paper Traders association (FPTA) Mr. A. Venkat “Domestically our industry is producing only 3,00,000 MT Tonnes against our total demand of 8,00,000 MT paper and paper board. So levying of anti dumping duty on a product which is predominately dependent on imports, will only artificially increase the price and monopolize the market. It will be a burden to the common man. FPTA opposes anti dumping duty on coated paper, especially when domestic producers are not able to satisfy the domestic Paper demand. We support anti dumping duty if domestic paper production is in sync to the demand.” 

Government must watch the profit of paper mills which has been increasing continuously in last two years. Despite of high raw material and energy cost and facing intense competition from cheap imports flooding the domestic market due to preferential tariffs extended under the FTAs, how paper mills are attaining profits in their book of accounts? Operating margins of paper companies were in the 13-14 percent range over FY12-15. Margins expanded by about 350 bps to 17 percent at the end of FY17: the highest when compared to the previous six fiscals due to a decline in raw materials (constituting 45-50  percent of net sales) and power costs (about 16 percent of net sales).

On paper imports, Mr. R.N. Agarwal, Chairman & MD of N.R.Agarwal Industries Ltd. a leading manufacturer of writing and printing paper said that “In last one year, there have been more imports. Yet we have successfully been able to sell or compete with the price at which the imports are coming. It’s not that imports are coming very cheap. I personally don’tthink that import is going to be a big threat. We have to just be competitive and efficient player.” 

 “Paper industry has strong backward linkages with the farming community, generates employment in rural areas, and significantly contributes to the national objective of bringing 33% of land mass in India under tree cover, apart from also significantly contributing towards the national objectives of education and literacy, and its future commercial viability in the country should not be threatened. Government needs to provide a level playing field to domestic manufacturers vis-a-vis imports as foreign manufacturers have easy access to captive plantations, and hence raw material,and also energy at far more competitive costs in their respective countries”IPMA Secretary General, Rohit Pandit said.

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