A 20 per cent depreciation in the rupee against the dollar has impacted prices of commodities that are imported. However, there is an exception in coated paper, mainly imported from China.
Chinese suppliers have cut export prices by 20 per cent since July, which has offset an equivalent weakening in the rupee.
About 80 per cent of coated paper comes from China, followed by Indonesia, according to an industry official. Both are major exporters to the US and Europe. Things went against them, earlier this year, when America and some Western countries imposed anti-dumping duties. The two nations have since been pushing coated paper into India, in a big way. Recently, Thailand also imposed an anti-dumping duty on Chinese coated paper. “Last year, the average monthly import of coated paper was around 10,000 tonnes, which was the actual gap. This year’s average import is around 18,000 tonnes, which has created a surplus situation in the domestic market. Chinese mills are finding India a dumping haven,” said A K Ghosh, vice-president (sales and marketing) at JK Paper. The average price of imported coated paper is down from $900 per tonne in July, to $730-740 per tonne. It is available with distributors at Rs 51,000 per tonne while the Chinese variety is available at Rs 50,000 per tonne. Domestic producers have taken a price cut of up to Rs 6,000 per tonne this financial year, though their costs have been moving up due to high cost of inputs like coal.
The annual domestic market size of coated paper is around 500,000 tonnes. Bilt and JK Paper together produce around 360,000 tonnes annually. The gap is met through imports. “However, with a gap of 140,000 tonnes, the monthly import should not have been more than 12,000 tonnes. But this year we are seeing average monthly import of 17,000-18,000 tonnes,” said another industry official.
Bilt group director finance B Hariharan however said the company is able to sell coated paper comfortable and has also decided to pass on a price hike of Rs 1,000 per tonne from January. “We are not competing against imports. With pulp prices on a decline, margins will look up from next quarter,” he said
