Will Mideast conflict raise newsprint prices? Indian publishers watchful, not worried

In FY25, Indian print publishers experienced a decline in newsprint prices, benefiting from easing crude oil costs. However, the recent escalation of conflict between Israel and Iran in West Asia has introduced fresh uncertainty, affecting oil prices and global freight routes. This has raised concerns about the stability of newsprint import costs, which are crucial for print publishers across India.

Global newsprint prices, after peaking at around $950 per metric ton in 2022, softened significantly by the end of 2023. By October 2023, prices settled near the $500-600 mark, with only minimal fluctuations since then. This period of relative price stability brought much-needed relief to the print industry, which had been grappling with high input costs and margin pressures since the post-COVID recovery phase.

Confirming this trend, Uday Jadhav, CEO of Sakal Media Group, said, “Over the past six months, there has been a softening in newsprint prices, approximately a 5% decline.This correction follows a broader trend that began post-2022.”

Further illustrating the current landscape, in their financials, DB Corp, publisher of Dainik Bhaskar, reported Q4 FY25 newsprint prices at around Rs 47,500 per metric ton, down nearly 4% year-on-year. The company further stated, “Going forward, we believe that this price should stay or come down by maybe a percent or so.”

Interestingly, despite the initial concerns surrounding global disturbances, an industry stakeholder pointed out: “Newsprint prices are stable at around $500 PMT. This is irrespective of global disturbance. It has no link with petroleum prices fluctuations. The dollar exchange rate coming down from Rs 88 levels to Rs 85 levels has also reduced imported landing costs. This is expected to positively impact domestic manufacturers, as they often price their products in sync with imported landed prices.”

Geopolitical tensions disrupt freight and complicate pricing outlook

The recent geopolitical conflict in West Asia has added complexity to the pricing outlook. Jadhav commented, “Forecasting oil or newsprint price trends in the current geopolitical climate is challenging. If the Middle East conflict does not escalate, we expect newsprint prices to remain range-bound with a moderate variation of 4–5%.”

According to him, the disruptions in freight movement caused by the war, including longer ocean routes, increased insurance premiums, and higher transport costs. 

“India sources newsprint from North America, Europe, Russia, Korea, and Australia. Shipments from Russia come via NVOCC carriers, incurring high freight charges. Similarly, cargo from Canada is being rerouted via the Cape of Good Hope, significantly increasing lead times. In addition, any potential capacity reductions such as mill closures in Canada could place upward pressure on prices in the near term,” he said.

Another industry executive, speaking on condition of anonymity, explained, “Most media houses typically maintain a stock of newsprint that lasts anywhere between six months to a year. While they might argue that they’ve planned well, the ongoing conflict between Iran and Israel has created uncertainty in global supply routes.”

He further explained, “If the geopolitical tensions ease, the impact on newsprint pricing could stabilise in the long run. At the moment, price fluctuations are largely nominal and driven more by inflation than by any major supply disruption. This kind of price movement is visible across categories, not just in print.”

He further explained that India sources most of its newsprint raw material from Russia, which remains a friendly trade partner. “Domestically, there are a couple of manufacturers, particularly in southern India, but they are relatively small players compared to international suppliers. The quality of newsprint also varies where brighter papers generally indicate imported stock, whereas recycled newsprint, which is more commonly used in regional language publications, is produced within India.”

Soft newsprint prices bolster margins amid ad revenue challenges in FY25

Despite flat or marginally declining advertising revenues and print volumes, HT Media’s print segment posted strong profitability gains in FY25. According to its earnings call, operating EBITDA grew by 67% year-on-year to Rs 121 crore for the full year, with Q4 EBITDA at Rs 61 crore. Margins expanded by approximately 400 basis points. The company attributed most of the margin expansion to savings from softer newsprint prices compared to heightened costs the previous year.

“Cost has substantially improved because if you remember last year was a year of heightened newsprint pricing and therefore most of the margin expansion is attributed to the savings in newsprint that’s come through,” HT Media stated.

DB Corp reported a net profit of Rs 371 crore in FY25, marginally lower than the previous year but reflecting a 38% compound annual growth rate over three years. The company noted that profitability improvement was driven by efficient cost management, favorable forex trends, and soft newsprint prices.

Girish Agarwal, Director at DB Corp, in their financial reports stated that about 25% of newsprint consumed annually is imported, with quarterly variations between 20% and 30%. “For example, in Q4, the number was 77% domestic and 23% imported,” Agarwal said. 

“If the newsprint price gets impacted because of the dollar then it will impact the Indian also because Indian newsprint manufacturers do the parity on the imported one,” he added.

While some stakeholders believe prices remain stable, others, like Vinay Hegde, Chief Investment Officer at Madison World, highlighted the impact of the West Asia conflict on price volatility. 

He said, “Currently there is a lot of volatility in newsprint prices and the obvious reason being the conflict in West Asia. So whatever easing of prices we saw at the beginning of the year is no longer visible with the trend being uncertain.”

He also noted the pressure on print advertising in India and the challenge for publishers in increasing ad rates. “Publishers will be looking up to the government to bring in some relief measures till oil prices stabilise and the AdEx shows some buoyancy.”

Regarding procurement strategies, Jadhav said, “Despite volatility in global oil prices, we haven’t seen a direct impact on our newsprint costs or profit margins. The reason is the newsprint is already bought for the next few months. If prices go up, we will slow down our procurement process and will wait to stabilise current unrest.”

On the outlook, Jadhav added, “Today fortunately the war scenario seems like it may end very soon. But if not, it could extend this phase of unpredictability.”