A review on paper cost

While prices are expected to increase by three per cent in 2015, sufficient production could moisten the prices and also China’s paper output will increase by 67 per cent till 2025. Paper is freely traded globally. Prices in India are linked to the landed cost of imported paper with a small premium for faster delivery, due to local logistics.

 

The issues seen in the paper industry in India differ vastly from those in other paper manufacturing countries. For instance, wood availability is a huge bottleneck and wood is often imported. Also, while globally the mills are located within 100 km from the wood source, timber travels 400 km in India for papermaking.

 

Technologically with fuel accounting for about seven to eight per cent of the total cost, mills suffer. India has small-sized mills too and they are now investing in technology to reduce power and water usage. Biomass that is obtained from pulping is used to generate power. Many of these new units produce more power than needed for the mill.

 

In international market, there is an increase in demand as per capita paper consumption in developed countries as it is peaked at over 250 kg per person and is likely to fall. The country’s paper usage of nine kg per capita is among the lowest in the world; for reference, consumption in China is 71 kg per person.

 

Higher literacy, growth in packaged products, pick-up in the economy and increased use of sanitary paper products are expected to boost demand.