Paper prices surge 30% on newsprint, input spike

The recent manipulation of newsprint prices coupled with rising raw materials costs have pushed up paper prices by about 30 per cent in the last one month. Paper prices, depending upon their grades, are now quoting between Rs 18,000 and Rs 35,000 a tonne.

Prices of raw materials, including wood, baggase and waste paper imported from overseas, have been surging since the last one month. Raw materials prices vary depending upon the proximity, availability and need of paper mills from the selling point.

Today, the Rs 17,000 crore Indian paper industry, contributing about Rs 2500 crore to the exchequer, is facing huge problems. Despite employment generation potential, the industry is heading towards extinction steadily.

Unplanted wood is cut and sold throughout government tenders and, hence, there is no question of cutting live trees for their use in paper manufacturing. Secondly, there is no proper waste paper recycling system in India, hence, waste paper is imported from abroad and recycled in the domestic market, said an industry source.

"The 60 lakh tonne paper industry is the only route through which the government can address the socio-political agenda and ease obstacles in their literary mission such as "Sarv Siksha Abhiyaan" by providing enough papers to read and write at cheaper price to students. Surprisingly, the government has big plans on papers but the finally nothing comes in practice," said R Narayan Moorthy, secretary general, Indian Paper Manufacturers Association.

The paper industry requires only 1.2 million hectares for green plantation of the 65 million hectares of degraded land available in the country. But instead of allotting fertile land, the government has, on all occasions, allotted barren lands in Kutch and Rajasthan.

The per capita paper consumption in the country is about 6 kg, which is estimated to grow up to 10 kg in near future if the government is facilitating paper producers with required plantation area, Moorthy added.

The government is seen lenient towards newsprint industry by lowering taxes but, but the paper industry continues to attract up to 40 per cent of taxes in various forms.

According to the National Manufacturing Competitiveness Committee, fuel wood demand in the country is estimated at around 280 million metric tonne (MMT) cumulative by 2020 against the current demand of 80 MMT.

Pulp wood paper industry would be requiring about 13.2 MMT cumulative by 2020 against the current requirement of 5.2 MMT, thereby making a shortfall of 93 MMT cumulative.