After increasing prices for the last four quarters, domestic newsprint manufacturers are entering into contracts to sell the commodity at a price that is lower by about Rs 2,000 a tonne compared to the previous quarter.
Companies say the resistance from publishers to high prices has forced them to lower the rates even as the imported newsprint has turned costlier owing to the rupee depreciation. The softening in prices is a welcome relief for the publications.
“There was a resistance from buyers to the previous quarter prices. Therefore, contracts are being entered at a lower price this quarter,” said V D Bajaj, executive director, Rama Newsprint and Paper, which produces 144,000 tonnes newsprint annually. Newsprint prices are revised on a quarterly basis.
Some, however, said they have maintained the previous quarter prices. “We have maintained the average price at the previous quarter levels of Rs 40,000 a tonne following a request from publishers. Usually, domestic prices are benchmarked to the landed cost of imported newsprint. Imported newsprint continues to be costlier by Rs 5,000 a tonne owing to the rupee depreciation,” said P S Patwari, executive director, Emami Paper, which has a newsprint capacity of 150,000 tonnes.
The newsprint prices (of the 45 gm per square metre or GSM variety) had jumped by nearly 50 per cent since January 2008 to Rs 38,000-40,000 a tonne in the July-September quarter exerting huge pressure on the margins of the newspapers. The spurt in newsprint costs had forced many newspapers to reduce the number of pages while forcing some to put launch of new editions on halt.
