AIWPDA: Cut kraft paper export to minimize the scarcity of waste paper; pledges to support Paper Mills

AIWPDA: Cut kraft paper export to minimize the scarcity of waste paper; pledges to support Paper Mills

New Delhi | 2nd December 2020 | The Pulp and Paper Times:

The downtrend in the domestic waste paper collection has led to 30 to 40 per cent drop in the overall recovery of waste paper due to Covid 19 pandemic. The imported waste paper has also been hampered and touching to $220 per tons as of now, leading to abnormal domestic OCC price at INR 17500 per ton. 

The problem is not looking solve here unless some collective steps to be exercised by all the stakeholders. All India Waste Paper Dealers Association (AIWPDA) who is a key player in this situation assumes the problem of scarcity of waste paper lies in the export of finished kraft paper in view of the ban on imported OCC to China. 

"The increased export of finished Kraft is causing the Loss of domestic recovered fibre, leading to scarcity of Recovered Fibre in future. Only those paper mills, which are importing fibre (OCC/ Mix waste) should be permitted to export finish Kraft paper/ pulp up to 50 percent correspond to their import of waste paper in current and previous month, say November and December," exclusively said Mr. Naresh Singhal, President – AIWPDA.

Mr. Singhal further said that, to control the rising rates of finished Kraft paper and waste paper and to stabilize the market trends, it's suggested to ban the export of finish Kraft paper and pulp up to certain limit till the situation gets normalised, say for 3 months with immediate effect.

Notably, the paper mills are largely dependent upon waste paper imported from the USA and Europe. Owing to its poor collection and increase in its import cost in the last over two months, paper mills have increased the cost of kraft paper multifold.

VK Dewan, president, Federation of Corrugation Box Manufacturers of India said the import and export data available with the federation over the last four years does not show any fall in import expected during the lockdown from May to July. Even the imports are set to increase this year as compared to last year, he asserted.

AIWPDA assumes that after the festival and marriage season to be over on 12th December, the sale of goods in the market will drop to a significant level, it may come back up to 50 to 60 percent level and hence the requirement of Kraft paper using in packaging may also drop. 

"Due to the fall in demand, it's assumed that the price of Kraft paper after 15th December will be either stable or in decline mode depending on the demand," Mr. Singhal admitted.

"The price of kraft paper has already increased by 30-35 per cent and it is still increasing. Besides, the supply of kraft paper is erratic, which has caused a crippling blow to the corrugation box industry as we are unable to get corresponding conversion cost from our customers," said Surinder Jain, president, HP Corrugation Box Manufacturers Association.

He said, as a responsible association, we have decided that the members of AIWPDA pledge to continue to support the paper mills during these challenging times. Members will ensure to serve their local and regular customers first.

"AIWPDA will request all members, not to take any undue advantage of the situation by demanding frequent price increase and hold stocks for excess profits," he said.

AIWPDA is also working upon on measures to increase the recovery rate in the domestic market.

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