Ballarpur jacks up paper prices

Other companies may follow suit next week

Ballarpur Industries, the market leader in the paper industry, has revised the prices of its coated and uncoated paper upward by Rs 250 to Rs 1,000 a tonne, effective November 1. Industry sources said other companies such as JK Paper and West Coast Paper were also planning a price hike.

Ballarpur's coated paper prices, from the current Rs 53 a kg level, will go up by 50 paise to Re 1 at the Mumbai market from tomorrow.

Uncoated paper price, at present Rs 45.40 a kg, will rise by 25-50 paise.

Paper mills have been raising prices every alternate month over the last few months. They are watching how the MOP (market operating price) behaves. The MOP is the price at which dealers have to sell paper in the market. Generally, when the market does not accept the price, dealers offer discounts.

At present, the overall demand is good, and it will be possible to understand the actual position in the first week of November. If the demand persists, other mills will raise prices next week.

This year, the paper demand for printing diary and calendar has been very good, with corporate earnings too improving consistently.

A Mumbai-based dealer said this time the paper demand for diaries and calendar is expected to be 5 per cent more than last year "� enough motivation for mills to raise prices.

But dealers are not wholeheartedly supporting the mills on the price hike as they fear that not much room is left in the market to digest the price hike.

Paper traders in Mumbai are also irked by the high rate of octroi, which is 5.5 per cent compared with 4 per cent VAT.

"Such high rate is incentive to evade octroi. Hence, octroi should be removed all together," said Shamji Karia, president of Paper Traders' Association, Mumbai. Reportedly, octroi is evaded on 70-80 per cent of papers that arrive in Mumbai.

According to a trade estimate, daily 400 trucks are entering the metro, and at least Rs 10,000 octroi per truck is evaded.