Exports of paper and paperboard from India shall continue to witness a decline in future, domestic players are at a huge cost disadvantage

Exports of paper and paperboard from India shall continue to witness a decline in future, domestic players are at a huge cost disadvantage

-National Education Policy NEP July 2020 and for the NEP -23-24 has still not given desired result by way of push in Writing & Printing Paper consumption
-Waste paper going down the drain is a National waste and this needs to be taken up by stake holders along with competent Government authorities & Institution
The below article is written by Mr. Aseem Bordia, Partner of Laxmilal and Company, Nagpur. He is also the Past President of the Federation of Paper Traders Association (FPTA) for the year 2022-2023. Mr. Bordia shares his views on the export of  paper, Waste paper scenario, and the present state of the Indian Paper Industry exclusively with The Pulp and Paper Times. Views are personal.
The Pulp and Paper Times

MARKET OVERVIEW:

Indian market is of  25 million tons i.e. (80,000 cores) .  There are over 850 Paper Mills.  The per capita consumption is 16/17 per kg.  The demand for paper in India will grow @6/7 % P.A. and it may be up to 38/40 million tons by 2030.  New capacities are coming up in the country in writing & printing segment and packing material segment.

There is a lot of excess capacity in the domestic market for the packaging sector especially in the Kraft paper& duplex board segments. The capacity built up is extremely high as compared to the actual market demand in our country. 

In the country National Education Policy NEP July 2020 and for the NEP -23-24 has still not given desired result by way of push in Writing & Printing Paper consumption.  We hope this year the result is felt.  The total Manufactures will be under pressure to manage price, demand and cost in the present market.  Similar situation is prevalent in writing & printing segment also. 

These are international trends and examples to understand the Global market overview. :-

UPM Finland a major paper manufacturer in Europe lowers Its outlook due to lower deliveries in most businesses and decreased pulp prices. During the second half of the year, market demand for UPM's products has been weaker than expected, leading to lower delivery volumes in most businesses. The weakened pulp market and the high wood cost in Finland had a negative impact on the UPM Fibres business.

The Fedrigoni Group on Oct. 3 announced its decision to exit the office paper business and will close Giano S.r.l, its Italian subsidiary operating in the office paper business segment — a separate vertical within the Special Papers business. In a written statement, Fedrigoni said, "This is a market, especially that of photocopy paper, that has been in decline for years and is dominated by large specialized international groups that, despite having more efficient production plants due to their size and the large volumes managed, have announced in recent years closures and reductions in their production capacity, as a result of the structural decline in market demand.

IMPORT  COST & INPUT COST

According to Resource Recycling report of October 15th, paper grades prices have come down. Mixed paper and OCC have sunk by 21% and 16%, respectively, this month. The national average price for corrugated containers, PS 11, dropped from $102 in September to an average $86 per ton. It’s a significant one-month decline but brings OCC closer to its year-on-year price: OCC was trading for $73 per ton this time last year and $40 per ton in October 2022.Mixed paper, PS 54, dropped $15, from $70 to $55 per ton. This compares to $14 per ton this time last year. Sorted residential papers, PS 56, dropped from $85 to around $71 per ton. This compares to $42 per ton one year ago. Sorted office papers, PS 37, remain around $123 per ton. This compares to an average $132 per ton one year ago.

EXPORT SCENARIO

The domestic players are feeling the pinch of declining exports. Exports of paper and paperboard from India shall continue to witness a decline in future as well. India being a fibre deficient country is dependent on other countries for imports to meet its requirements. Thus, the domestic players are at a huge cost disadvantage. 

WASTE PAPER & RED SEA CRISIS

The Global political & Economical situation worldwide has affected shipping movements to a great extent resulting in hike of shipping freight abnormally. Every country is trying to establish paper making capacity based on its domestic waste paper availability resulting in decline of exportable quantities. With very little effort towards organized waste paper collection infrastructure by the domestic players, the availability of good quality fibre is declining and the domestic mills face immense challenges to procure adequate raw materials.  Much efforts are needed to enhance the proper collection sorting & segregation of waste paper for reuse by paper Mills.  Waste paper going down the drain is a National waste and this needs to be taken up by stake holders along with competent Government authorities & Institution for enhancing the percentage of waste collection in the country is needed.  The dependency of waste import puts the Indian Paper Industry at cost disadvantage.
 

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