Move follows a revival in demand, need to offset recent cost increases.
Riding a demand revival, paper companies have started raising the price of coated paper, high-end copier paper and speciality paper.
The increase has been two-three per cent or Rs 1,000-1,500 per tonne with effect from this week. Experts said prices of all categories of paper were likely to rise next month. Earlier, companies had to reverse some price increases effected in the first quarter during the second quarter, though input cost-push continued.
Bilt and JK Paper, the two producers of coated paper, have increased the price by Rs 1,000-1,500 per tonne to around Rs 52,000 per tonne. An increase of Rs 1,000 per tonne has also been done in high-end copier paper. The top-end copier is now available for Rs 62,000 per tonne, while speciality and ledger paper is selling for Rs 56,000 and Rs 53,000 per tonne, respectively.
“The price increases are clear signs of demand revival, particularly in the segments where JK Paper is a major player. We also expect a rise in demand for writing and printing paper, as a result of the beginning of the notebook and textbook season, as well as the coming state Assembly elections,” said A K Ghosh, vice president (sales and marketing) at JK Paper. There are also indications that copier paper and writing and printing paper prices would rise further by end-January or early February.
Further, due to the rupee depreciation against the dollar, there is a significant increase in export of copier paper and printing paper. This is helping paper companies to ease inventory. All these provide an opportunity to recover part of the cost increase, amounting to Rs 3,000 per tonne over the past three quarters in inputs such as coal, chemicals and wood.
An industry official said government purchases usually peak during the fourth quarter, as departments try to utilise unspent budgets. “This is also supporting the demand,” he said.
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Bilt’s group director, finance, B Hari-haran, said paper prices had touched bottom and, therefore, an increase was required. “In the previous quarter, pulp prices were high, while paper prices were low. The situation has reversed and we are seeing signs of firmness in paper prices,” he said.
India is one of the fastest growing paper markets, with the government’s thrust on education and a sizable budgetary allocation. The domestic paper industry is estimated at around 10 million tonnes. Of this, the writing paper segment accounts for 3.8 mt, packaging grade paper segment for 4.5 mt and the newsprint industry for 1.7 mt. All segments are growing at eight-nine per cent.