Newsprint prices set for 15% hike as geopolitical tensions inflate costs

Newsprint prices are likely to rise by as much as 15% in the coming months due to the impact of prolonged geopolitical conflicts on supply chains, freight charges, energy and import costs, industry sources have shared with e4m.

The impact, they said, will be reflected in the system gradually on account of existing inventory buffers, but multiple cost pressures are converging to signal an upward movement in the commodity cycle.

Higher global energy costs have increased production expenses for paper mills across markets, industry sources said. Moreover, longer shipping routes have extended delivery timelines, impacting the availability of newsprint in the near term.

Industry executives caution that the full extent of the price rise is still unfolding since much of the current supply is tied to earlier contracts or inventory already in the system.

Read earlier story on Middle East tension impacting newsprint prices

Although most imported newsprint currently reaching India is linked to earlier contracts, a sharp depreciation in the rupee, with the exchange rate touching around Rs 92.50 per US dollar, has already raised the landed cost of imports.

A similar trend is visible in imported waste paper, a key raw material for domestic mills, further adding to cost pressures.

With multiple cost factors moving upward at the same time, industry sources expect the projected 15% increase in newsprint prices to weigh on publishers’ margins to some extent, particularly if advertising growth does not keep pace.

Domestic vs imported: limited substitution

Domestic newsprint prices typically track imported landed costs, which refers to the total cost of bringing newsprint into the country, including the base price, freight, insurance, duties and currency exchange impact. The cost differential between imported and domestic newsprint currently ranges between Rs 5 and Rs 12 per kg, depending on grade and market conditions.

However, industry sources note that domestic supply cannot fully replace imports. Differences in quality, machine efficiency and grammage, with imported variants offering better runnability and lower wastage, limit substitution. In addition, domestic production capacity remains insufficient to meet India’s total demand.

Short-term scarcity of imported waste paper has also pushed up domestic production costs, further narrowing any pricing advantage.

Freight, fuel and insurance costs up

A key driver has been the disruption of traditional shipping routes. Vessels that earlier transited through the Suez Canal and Red Sea are now being re-routed via the Cape of Good Hope in South Africa, increasing both transit time and costs.

This shift has led to higher marine freight charges for both imported newsprint and waste paper. Rising crude oil prices have further inflated fuel costs for shipping, while heightened geopolitical risks have pushed up marine insurance premiums.

Container imbalances, caused by disruptions at key ports, have added another layer of cost pressure and tightened logistics availability.

From pandemic surge to current lows

The expected uptick comes after a sharp cycle over the past few years. Before the Covid-19 pandemic, imported newsprint prices were around $400 per metric tonne. Supply chain disruptions during the pandemic and the subsequent recovery phase pushed prices to a peak of $1,000 to $1,050 per metric tonne, according to media reports.

Prices began easing in FY23, falling to about $600 per metric tonne by the last quarter. More recent estimates indicate levels of $540 to $560 per metric tonne in Q3 FY24, with current prices hovering around $530 per metric tonne.

A similar trend was visible in domestic markets. Indigenous newsprint, which was priced between Rs 31 and Rs 35 per kg before the pandemic, surged to over Rs 70 per kg during the Covid period. Prices later softened, falling to around Rs 48 to Rs 52 per kg by mid-2023, depending on quality.

Cycle turning after a period of stability

The anticipated increase also follows a relatively stable phase for publishers. After the Russia-Ukraine conflict in 2022 triggered a 10 to 15% rise in paper prices in some regions due to elevated energy costs, the market had stabilised.

Companies such as HT Media and DB Corp indicated in their Q3 FY26 earnings calls that newsprint prices had remained stable to slightly lower on a year-on-year basis, supporting profitability.

HT Media said prices were still below last year’s levels and expected near-term stability supported by adequate inventory. However, it also flagged a potential shift in the commodity cycle, with some upward movement likely in subsequent quarters.

Similarly, DB Corp said prices remained largely range-bound, though geopolitical developments and foreign exchange movements could introduce volatility.

The coming quarters are likely to determine how sharply and quickly these cost pressures translate into realised price increases across the sector.