Indian newsprint demand H2 2020 – updating our April 2020 outlook

Newsprint II – Further demand drop by .5 million tons


Our March outlook for Indian newsprint demand was pessimistic, anticipating a fall in consumption to 1.5 million tons in the financial year 20-21 ending 31 March 2021. However, although we anticipated the tsunami of the Covid-19 pandemic and other economic factors, it is far worse 90 days later. We forecast a further drop in demand of another .5 million tons for newsprint by the country’s news publishers.

In March-end, we wrote, “A tsunami has descended on us with a vengeance. The current situation will call for every bit of resourcefulness by the Indian news publishers and newsprint buyers to weather the storm. For the first time, India and the world face a large number of simultaneous negative situations, including the Coronavirus outbreak. The latest news is that Russia joins the comprehensive list of stricken countries and regions where business and everyday life are coming to a standstill!

“The price of crude oil price has slumped from US$ 54 to US$ 25 a barrel in the 20 days from 1 March 2020 to 20 March 2020. Largely a consequence of excess demand in the face of halting economic activity, it is a power play to control the price and production of this crucial commodity by major producers Saudi Arabia and Russia.”

The Indian newsprint demand situation continues to be abysmal to the extent that one can say that there is no current demand. With zero or minimal advertising, the ad revenue is reduced by close to 90%. Several publishers have discontinued editions in either cities or languages where there was no circulation. With minimal pagination of the dailies that are printing, and generally without supplements, consumption of newsprint has dropped by 60%. Apart from salary cuts, there have been extensive layoffs of journalists and other personnel by print media organizations.

The English newspapers are the worst hit, and some of the regional dailies comparatively better placed. The Metropolitan area demand has fallen more sharply than the regional or rural market. Large cities such as Mumbai and Pune are severely affected with lockdowns being lifted very partially and slowly, even in June.

Although some dailies in South India have suggested that they have been able to maintain circulations, it is more likely that they have merely maintained readership. Advertising revenues are universally abysmal. Newspapers in Western and Northern India predominate consumption in a ration of 2 to 1 in comparison to South India dailies.

In cities such as Mumbai, there have been no home deliveries while in Pune delivery is partial, and in Delhi, newspaper deliveries resumed at the beginning of June. Many housing colonies, gated communities, and high rise buildings have forbidden deliveries leading to a 50% drop in circulations in metro cities. Simultaneously, television and Internet news media consumption has increased with several banks distributing a choice of newspapers and magazines to their account holders by eMail each morning.

The new normal is a year away

It will take a year for the industry to recover to normal, or what is being described as ‘the new normal.’ The publishers or newsprint buyers have massive stocks in inventory, which should take care of their requirements over the next six months.

In the meantime, logistics have not returned to normal, and truck-trailer costs have increased by as much as 50%. Transport charges are sky-rocketing, and ocean freight rates have increased.

Raw material availability, which was a challenge for Indian newsprint mills even earlier, has been very severely affected by the Covid-19 pandemic and the ensuing lockdowns. Newsprint production at many mills is stopped indefinitely, while others have switched to other grades of paper. Sales are very low for most suppliers from Russia, Eastern Europe, North America, Asia, and Australasia.

There are some delays as far as container and vessel suppliers, which make last-minute urgent supplies impossible. Two months’ notice is now required for timely shipments.

Newsprint price issues

Price is no longer the issue due to virtually nil demand! For all the above reasons, there will be no visible effect on prices in H2-2020. Most buyers will only purchase 30% of their regular or historical quantities.

Table 1

However, North American and European newsprint suppliers will not sell cheap even though markets will remain depressed until December 2020. As far as the effect of the lower price of oil, which is starting to creep upwards, there will be no effect this year. Despite the substantial reduction of oil prices this year, shipping rates have gone up, as shipping lines are starved of business and have raised freight rates. The effect of lower demand and lower oil prices is expected to be felt only in 2021.

Table 2

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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  1. This is a drastic reduction in newsprint demand which implies that the net pages produced in the 2020-2021 financial year will perhaps be as low as 50% of the previous year and only 40% of the 2018/19 financial year. Lower circulations and the closing of editions and a huge drop in advertising in the April to June quarter of the financial year indicate this forecast is unfortunate but likely to be correct.

    • Dear Mr Khanna,
      While the drop in advertisement revenue is understandable (the entire Indian economy is affected), what befuddles me is the drop in circulation and that too mainly in the main towns of northern and western India. Believe lot must be done to communicate with the reader.


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