Waste paper crisis a serious concern, says IARPMA

Mills producing paper and paperboard using recycled fibre (waste paper) accounts for 70% of domestic production and the remaining 30% is met by wood and agro residues segment in India.

According to IARPMA, the recycled fibre-based segment of the industry is facing scarcity of waste paper and this basic raw material for the industry is a burning issue at present. The waste paper suppliers are controlling the prices and as a result the paper mills have no option, but to cut their paper production according to the raw material availability and stock inventory. “No doubt this situation of waste paper shortage and uncontrolled pricing may stretch during the year 2021,” IARPMA stated.

Pramod Agarwal, president, IARPMA said that it was expected that the price of waste paper will reasonably surge due to shortage of supply in the post -Covid era.

“We didn’t expect that price will go up beyond Rs 15-17 per kg from the pre-Covid price of Rs 10-13 per kg,” Agarwal said. “But all expectations are buried now and the price of waste paper is increasing day by day without any limit.”

He added: “The industry is not in a position to absorb this uncontrolled price increase, as now it is being procured at Rs 22-24 per kg by the industry. It is also not able to pass on the price hikes to the end users, particularly due to the prevailing situation in the country.”

Agarwal further explained that the increase in kraft waste paper prices have reached Rs 22 per kg, which was Rs 10 during the pre-Covid period. Meanwhile, prices for other grades of waste paper have surged from pre-Covid price of Rs 13 per kg to Rs 24 per kg at present.

“Paper mills are not in a position to absorb the price hike of Rs 10 per kg in their raw material, as the finished newsprint and other grades of paper prices may touch up to Rs 40 per kg,” he added.

Agarwal pointed out the severity of the situation, and said that paper mills cannot shut down their production, as the industry has to pay interest, salary, and other expenses at any cost.

For the unexpected price hikes in raw materials, Agarwal blamed undue practices of storage and cartelisation by the waste paper suppliers on account of their vested interest for selling at high costs to the mills.

“The market price for collection of waste paper from households is also ranging from Rs 10 to Rs 13 per kg, but due to the illegal hoarding by the waste paper suppliers, the prices are escalating as per their vested interest. This uncontrolled price escalation is not affordable by the paper mills using waste paper as raw material in India,” Agarwal complained.

Agarwal urged the government to intervene and take necessary steps to check the illegal hoarding by conducting raids in the godowns and waste paper stocking centres and cease the raw materials.

“If desired, the list of the waste paper hoarders can also be made available to the government. The malpractice by unscrupulous suppliers who are creating artificial scarcity of waste paper availability in the country must be put on hold to ease the undue pressure on the paper manufacturers,” Agarwal concluded.