Spotlight: Newsprint Price Sees 40% Hike, Industry Worried

Newsprint, a low-cost non-archival paper, is most commonly used to print newspapers, publications and advertising material. There has been an almost 40 per cent spike in its price since the crisis began last year

e4m by Nishant Saxena
Updated: Mar 26, 2018 8:59 AM

The print industry seems to be heading towards a possible crisis with a price hike in newsprint because of the increasing raw material cost and China imposing a ban on imports of 24 types of rubbish including paper waste, in its campaign against environmental pollution.

Newsprint, a low-cost non-archival paper consisting mainly of wood pulp, is most commonly used to print newspapers, publications and advertising material. There has been an almost 40 per cent spike in its price since the crisis began last year.

China, the world’s largest paper recycler, produced about 63.3 million tons of waste paper pulp in 2016, according to the China Paper Association (CPA), with about 24 per cent of it produced from imported waste paper. “In the last six to nine months, the prices have increased. Also, the newsprint prices have gone through cyclicality over decades. However, the spike in price in the recent months is because of China,” said Pradeep Dwivedi, CEO, Sakal Media Group to exchange4media.
As the newsprint stocks with the publications are being used up, they are preparing to face the challenge and find the right measure to decimate the effect of the price hike. “Right now, some publishers can manage till the end of Q1 of the next financial year, and then there are some who have stock left only for one or two months, they will now have to order at the revised prices,” added Dwivedi.

However, Paresh Nath, Editor and Owner of Delhi Press magazine, said that since the revised prices have already entered the market, its impact can partly be seen in the coming financial quarter. Similar views were also shared by Indranil Roy, CEO, Outlook India.

“The print industry as a whole has not taken a call. Individual publications are taking their own measures. Some are cutting down the pages, some are increasing the retail price, some are increasing ad rates, etc.,” said I Venkat, Director, Eenadu, an Indian Telugu language daily newspaper.

Adding fuel to the fire over the concern of India’s print industry, which was already recovering from the ill-effects of demonetisation and GST, is the union government’s recent decision to publish ads of tender notices digitally instead of newspapers. This is also expected to further cause loss to newspaper companies. "Paper prices have gone up by 15-18 per cent and it's expected to rise more. It is and will continue to negatively impact the industry. On top of that, GST is unfavourable to the quoted paper which we use,” said Roy.

“Most print companies have shown de-growth in revenues. Some have missed the projections way off, making the newspaper and magazine owners jittery,” said Jwalant Swaroop, former CEO of Sakal Media Group and Lokmat wrote in a column on exchange4media.

While suggesting various coping methods that publishers might use, Dwivedi said, “The cost of marketing, distribution, salary cost and other components will also come under scrutiny.”

Of all the stakeholders affected by the crisis, according to a media report, shares of Indian paper companies are positively growing after manufacturers raised prices. To cope with the challenges, the print industry is expected to demand better rates from commercial advertisers as well as the government based on the tremendous growth shown in the latest Indian Readership Survey. “We now have IRS as a currency to show growth of the total readership. The value of the print media is still noticeable,” said Dwivedi adding that this is not a permanent crisis and can be handled like any other problem with innovative thinking.

“There have been years in the past when the prices were similar and publishers did balance the situation even at that point in time. Yes, it is a big problem. It is a problem that calls for innovative thinking but like any business challenge, it’s not so big that everything falls apart,” he said.

Venkat is furious about the low cover prices of newspaper and magazines in India. He said, “Our cover prices are so less. Even in Sri Lanka, Bangladesh and Pakistan, it is around Rs. 14-15. Though their currency value is different, where are we compared to them? Thanks to one particular group, the prices are kept low because they don’t want to increase it. If one leading publication does that, pressure trickles down on everybody.”

Sharing similar thoughts on Indian readers’ reluctance to pay for news, Paresh Nath said, “I wish that cover prices should increase because they are already very low. Also, if the cover prices are low; the delivery cost is high. So in case, the cover price is increased, it will somehow give more incentive to the distributor to sell newspapers and magazines.”

To calm down a panicked industry, Nath, who has had a very long association with the print industry, said, “It is still not doomsday and the newspaper industry can still survive by increasing the cover price and reducing the pages. These two things put together will help the industry weather the crisis.”

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