INS seeks increase in government ad rates

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INS seeks increase in government ad rates

Lately the newsprint prices have shot up in India and worldwide. Recently, the government of the United States of America hit the Canadian forestry industry with duties and also held to countervailing duties on Canadian newsprint. In a preliminary investigation carried out by the American authorities, it was found out that Canadian exporters under-priced coated groundwood paper by between 0 and 22.16%.

Uncoated groundwood paper includes newsprint, book publishing and printing and writing papers. It was determined that the Canadian exporters sold newsprint in the US at 22.16% less than the fair value. It was noted that the maximum margin, 22.16% is lower than 54.97% (up to) subsidy rate alleged by North Pacific Paper Company based in Washington, which had earlier made the petition to the department to impose tariffs. It complained Canada was dumping newsprint into the American market and unfairly subsidizing its industry at home. The newsprint prices in the west coast of the United States of America increased from US$ 545 to US$ 605 (August 2017 to January 2018) and increased from US$ 575 to US$ 635 in the east coast in the same period.

The US Commerce department’s investigation began in August 2017, and an International Trade Commission investigation began the following month. This is the second time that the Trump administration has slapped duties on the Canadian forestry industry in recent times. The dumping rate was calculated as 22.16% for Catalyst Paper Corp and all other producers excluding Resolute Forest Products and White Birch, which had zero dumping rates.

On the other hand, according to news outlet Keskisuomalainen, press operators across Europe have run into a shortage of both newsprint and magazine paper. The reason for this shortage is the closure of factories and machines and bankruptcies in forestry companies. With a spike in demand, the paper manufacturers found it difficult to maintain supplies and this led to a 10% hike in paper prices in the past year.

The price hike has also affected the Indian newspaper industry as a result of which it is asking for help from the government. An eight-member delegation of the Indian Newspaper Society met Information and Broadcasting minister Smriti Irani, asking the government to provide immediate relief by increasing the rates of government advertisements such as DAVP ads.

According to an article published on 14 March 2018 by Hindi daily Dainik Jagran, the price of newsprint in India has increased by 40% in the last one year. The same article says that since 60% of the cost of a newspaper is of the newsprint alone, publishers are finding it difficult to raise even half the production cost of a newspaper by its cover price.

The Jagran article says the newsprint cost has increased from Rs. 33,000 a ton till last year to Rs. 52,000 a ton now, an increase by around 40%. Citing the main reason as that of newsprint imports, the article says that half of India’s newsprint requirement is met by imports – of the 28 lakh (2,8 million) tons consumed, only 14 lakh tons is produced by domestic paper companies. Akhila Urankar, president of the Indian Newspaper Society, informed Irani that the way newsprint prices are rising and the rates of advertising are stagnant, it is not possible to produce newspapers.

Apparently, Urankar suggested that since the government advertising rates were last revised in October 2013, increasing government ad rate is in any case feasible. The minister agreed to consider the plea coming from the Indian Newspaper Society delegation.

Based on our queries to some newsprint suppliers in North India, we notice considerable difference in newsprint prices from the figures given in the Dainik Jagran article. Our queries indicate that newsprint prices in India seem to have increased from Rs. 33,000 a ton last year to Rs. 47,000 a ton currently, which is still a significant 42.4% increase in domestic newsprint price compared to last year.