Newsprint sector faces new hurdle on recovery path
Newsprint cost has now risen to $1000 per tonne due to the pandemic's impact on the functioning of mills & Ukraine war disrupting import of newsprint
It appears that the print industry's best days are yet to come after seeing the worst during the height of the pandemic. The new challenge for the print industry is a shortage of newsprint due to supply issues and a steep increase in prices.
Newsprint cost has now risen to around $1000 per tonne, up from $700-$750 (in December 2021). Experts say several factors have led to this shortage – impact of Covid on functioning of newsprint mills and waste paper recycling, and the Ukraine war that has disrupted the import of newsprint. Newsprint is produced by several countries, including Canada, the United States, Korea, and Russia, but the war has affected newsprint supply adversely.
Amit Chopra, Joint Managing Director, Punjab Kesari, says the pandemic affected the collection of waste paper all over the world. As a result, newsprint mills that use recycled paper suffered due to scarcity of raw material. Moreover, many newsprint mills were forced to shud down due to low demand for the same during Covid. Many of the mills did not resume operations. In certain cases, supply could not meet the demand.
Chopra further said the cost of shipping has become prohibitively expensive as a result of the pandemic's disruption. The conflict in Ukraine has further added to the problems since Russia is India's largest supplier. “Paper mills in India do not have enough waste paper available and shipment orders are taking at least five months to arrive, resulting in a supply and demand gap,” Chopra added.
According to Varghese Chandy, VP-Marketing & Advertising Sales, Malayala Manorama, newsprint is a 100 per cent imported commodity because Indian manufacturers are not able to meet the demand in India. The quality of newsprint is also not good enough for high-speed printing machines used by Indian newspapers, he said.
"While newsprint prices are unlikely to fall dramatically, we are hopeful that the situation will improve if the war ends. It's a difficult time for all newspapers; they're trying to stay afloat in this crisis,” said Chandy. He also stated this was not the first time the industry had experienced a crisis and similar events have occurred in the past. “We will overcome and survive this as well."
This crisis has forced several smaller publications to shut shop whereas some national names have cut down pagination or the number of pages.
According to Chopra, some newspapers anticipated this crisis and stocked up on newsprint in advance. “The problem is even if the paper is stocked, how much can one stock anyway?” He is, however, hopeful that the situation will stabilise soon. "We anticipate that everyone will join hands together to help the printing industry in this crisis. In April and May, things will be bad, but by June and July, it should get better. We hope shipments of waste paper and newsprint will begin to arrive soon,” Chopra added.
As for Mohit Jain, President of Indian Newspaper Society, the domestic mills are asking for more money which is higher than import cost. This is turn, is causing more trouble. He further explained that the total capacity in India is only 0.7 million tonnes but the total consumption is 1.4 million tonnes. “The domestic capacity of newsprint is grossly insufficient. Therefore, publishers are compelled to import and the quality of domestic mills is inferior to imported ones.”
According to Jain, publishers today are running low on inventory and they are facing material shortage. “The price has gone up so much that many newspapers - small and medium - are likely to close down or go into losses.”
He also shared that domestic mills are unable to meet the requirement and in between these mills convert their capacity into writing and printing because it gives them a better margin.
Jain mentioned that INS has appealed to the Indian government to remove the 5% custom duty. They have also put in a request that mills in India have the Registrar of Newspaper of India (RNI) licence. Jain also contended that they have asked the advertising rates to be increased as well. “Our DAVP rates should be revived significantly.”
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