Newsprint prices rising as they were bound to

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newsprint
Newsprint storage of one of the major South Indian daily newspapers

Newsprint prices that were benign in 2017 have been inching up in 2018, although not at the rate claimed by newspaper and magazine owners who seem to think that since they own the media they can say anything even if it is not absolutely correct merely to dramatize the situation and their so-called plight. The indicative prices in November 2017 for 45 gsm newsprint per kilogram as collected by our research associates in Ipp-Star (www.ippstar.org) were: Khanna Papers Rs. 38; Rama from Rs. 32 to Rs. 34; and Emami Rs. 35 per kilogram. The current indicative prices as collected on 21 May 2018 were: Khanna Papers Rs. 49 (an increase of 28.9%); Rama from Rs. 39 to Rs. 41 (an increase of 21.2%); and Emami from Rs. 44 to 45 (an increase of 28.6%).

The overall increase in the six months from November 2017 of 26.23% is a significant hike for an industry that does not charge a rational cover price for newspapers, although it is not as much as the 40% claimed in Indian media headlines. Publishers are acknowledging that they have only themselves to blame since their daily cover prices varying from Rs. 3 to Rs. 10 are much lower than those in Sri Lanka, Pakistan and Bangladesh, which are around Rs. 15.

As we have written numerous times over the last 40 years, the key problem is the lack of an Indian government forest policy that encourages managed forests and productive harvesting. Based on appropriate tree species for the purpose of creating watersheds and carbon sinks, managed forest could easily be paid for by forest industries such as lumber and paper-making apart from the savings generated by hydroelectric power generation and the production of clean and potable drinking water.

In the meantime, the scarcity of fiber has made it very uneconomical to produce newsprint in India. Increasingly, the newsprint capacity is either idle or being turned into higher prices papers. Newsprint consumption is above 3 million tons a year according to IppStar. Annual newsprint import is in the region of 1.8 million tons.

While various reasons for the rise in the price of newsprint are being given, including Trump’s anti-dumping duty against Canadian mills at the behest of a single US supplier, and that of the Chinese changing their policy of being the largest waste paper processor in the world, the actual fact is the rise of pulp prices and the better value addition
offered by bleached and coated writing papers and boards in comparison to standard newsprint.

Almost a million tons of newsprint capacity closed in 2017. Industry insiders expect more machines to shut down and more than half the profits of integrated forest and paper companies are coming not from paper but from pulp, plywood and bio-diesel. China has also become a net importer of newsprint and Australia, which has become a major supplier of newsprint to India, has seen major producers such as Norske Skog convert a newsprint machine to LWC production as far back as 2014.

In February we warned that paper prices were likely to move up in India with the hardening of pulp and hardwood, prices which had risen US$ 240 a ton in the previous six months. With the import customs duty at nil since May 2012, the industry currently imports about 1.25 million tons of pulp for paper making. Indians and their newspaper and paper industries are suffering from the lack of managed forestry, the low price of printed products of which newspapers are lowest and worst, and finally from the inability to collect and process waste. This is a real shame for a forest fiber-short country that cannot manage to even collect its used paper for recycling.

2023 promises an interesting ride for print in India

Indian Printer and Publisher founded in 1979 is the oldest B2B trade publication in the multi-platform and multi-channel IPPGroup. While the print and packaging industries have been resilient in the past 33 months since the pandemic lockdown of 25 March 2020, the commercial printing and newspaper industries have yet to recover their pre-Covid trajectory.

The fragmented commercial printing industry faces substantial challenges as does the newspaper industry. While digital short-run printing and the signage industry seem to be recovering a bit faster, ultimately their growth will also be moderated by the progress of the overall economy. On the other hand book printing exports are doing well but they too face several supply-chain and logistics challenges.

The price of publication papers including newsprint has been high in the past year while availability is diminished by several mills shutting down their publication paper and newsprint machines in the past four years. Indian paper mills are also exporting many types of paper and have raised prices for Indian printers. To some extent, this has helped in the recovery of the digital printing industry with its on-demand short-run and low-wastage paradigm.

Ultimately digital print and other digital channels will help print grow in a country where we are still far behind in our paper and print consumption and where digital is a leapfrog technology that will only increase the demand for print in the foreseeable future. For instance, there is no alternative to a rise in textbook consumption but this segment will only reach normality in the next financial year beginning on 1 April 2023.

Thus while the new normal is a moving target and many commercial printers look to diversification, we believe that our target audiences may shift and change. Like them, we will also have to adapt with agility to keep up with their business and technical information needs.

Our 2023 media kit is ready, and it is the right time to take stock and reconnect with your potential markets and customers. Print is the glue for the growth of liberal education, new industry, and an emerging economy. We seek your participation in what promises to be an interesting ride.

– Naresh Khanna

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