Newsprint prices head north

After being forced to cut prices in the last four quarters due to cheaper imports from China, domestic newsprint manufacturers have hiked prices by Rs 500-750 a tonne, an increase of about 2 per cent, for the October-December quarter.

Companies are also expecting a further revision in the next quarter as foreign suppliers have signed fresh contracts at higher rates for the January-March quarter.

Over the last year, the average price of newsprint had come down from Rs 30,000 to Rs 25,000 per tonne.

Low profitability in the newsprint segment and firmness in the writing and printing (W&P) paper segment had prompted most domestic newsprint manufacturers to shift from newsprint to W&P (writing and printing paper) production.

New capacity additions in the newsprint category are being done with a swing facility, where manufacturers have a flexibility to switch from newsprint to W&P paper and vice versa depending on the price realisation.

''With an increase in prices, our net sales realisation per tonne will be higher and will mean an increase in revenue for the current quarter. The price outlook is firm now. Since the foreign suppliers have signed contracts at a rate of $595 per tonne for the next quarter versus $570 this quarter, we see a scope for a further increase in the next quarter,'' said V D Bajaj, the executive director of Rama Newsprint and Papers (RNPL).

The annual newsprint consumption in the country is estimated at 1.6 million tonnes. Of this, almost half is met through imports. The import duty on newsprint is 5 per cent, whereas the writing and printing paper attracts a duty of 10 per cent.

''There is rising pressure on the raw material side and therefore prices had to be increased marginally,'' said Raji Philip, president of the Indian Newsprint Manufacturers' Association and chairman and managing director of Hindustan Paper Corporation.

''Last year, the country imported 0.8 million tonnes of newsprint. Since consumption is also moving up and imports are cheaper due to rupee appreciation, there is a possibility of imports going up this year,'' he said.

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Domestic newsprint manufacturers have hiked prices by Rs 500-750 a tonne for the October-December quarter

Companies are expecting a further revision in the next quarter as foreign suppliers have signed fresh contracts at higher rates for the January-March quarter

The annual newsprint consumption in the country is estimated at 1.6 million tonnes, with almost half the demand met through imports