Corrugators in distress as kraft paper prices soar by 29%

Perturbed over the situation, on 20 March 2017, Andhra Pradesh Corrugated Box Manufacturers’ Association (APCBMA) conducted a distress meeting to register protest against the price hikes.

Since January 2017, there have been four paper price revisions with an effective increase of 22-29%, said MVM Bharat, president, APCBMA. “There is some increase in the price of overseas waste paper but it is needed only for manufacturing higher grade of kraft paper whereas lower grades of paper require only domestic waste in which there in not much increase. Therefore, the increase in price for the lower grades cannot be the same as higher grades. The paper mills are increasing the same quantum across all grades on the same day.”

The corrugators are of the opinion that the price hike is orchestrated not reflecting the actual demand and supply scenario.

M L Agarwal, senior member, APCMBA, said, “To create a shortage and to implement the steep increase, the paper mills are enforcing the closure of mills for up to five days every month. They are conducting meeting across India at regular intervals and to monitor the closures and price increases. The fact that all the mills across the country increase the same amounts and on same days goes to show that a cartel is in operation.”

The association has expressed the need for the government to take cognizance of the situation and take corrective action to prevent runaway inflation of all consumer products as corrugated boxes are the tertiary packaging requirement of every product used by the common man.

Bharat said, “To act as a deterrent, the government should exempt kraft paper from customs duty. This will control the mills from making such price increases. Also, the cost of boxes will come down as imported paper is of better quality requiring less quantity of paper to make the same box. Waste paper is in any case exempted from customs duty and adding kraft paper will make a marginal difference in foreign exchange outflow.”

Andhra Pradesh Corrugated Box Manufacturers’ Association

The corrugators said the effect of this is not only in Andhra Pradesh but on the nation as a whole. The corrugated box industry in India is estimated to be worth Rs 18,000 crore with more than 12,000 box making units, whose existence is at stake due to soaring raw material costs.

During the distress meeting, B K Karna, director, PCRI, spoke on the quality and significance of kraft paper and troubleshooting.​