Global Cardboard Prices are Expected to See a Staggering Rise Amidst Surging Paper Costs

The global cardboard industry is anticipated to experience a significant price surge in its products catering to the agro-export sectors, expecting a 12% to 14% hike due to escalating paper costs. Paper, the principal component in cardboard manufacturing, is largely imported from the US and parts of Europe, both of which are signaling a price escalation. The industry, recovering from a substantial price drop in 2023 following an earlier spike in 2022, is now facing fresh challenges that could reverse the trend of declining costs.

Leonel Azuncor, associated with the Ecuadorian cardboard sector, conveyed at a press briefing after a period of price moderation in 2023, this marks a return to a pattern of inflation that afflicted the industry in 2022, driven by raw material cost hikes and logistical hurdles.

Engineer Luis Alberto Jaramillo, representing the commercial interests of the Ecuadorian cardboard industry, part of the Noboa business group explicates several driving factors influencing the 2024 forecast. A crucial aspect is paper's status as a staple commodity, intricately linked to other raw materials and affected by the US's projected 14% export price increment due to supply restrictions from plant shutdowns and enhancements.

Jaramillo also notes the complications faced by paper importers due to transit issues through the Panama Canal, leading to higher shipping costs and delays. Alternative routes via the Strait of Magellan or transcontinental transfers in the US add to the cost and timeliness challenges, particularly during peak seasons.

Additionally, the geopolitical bedlam stemming from the Israel-Hamas conflict that commenced in October 2023 is expected to augment cardboard prices. The repercussions for global trade, exacerbated by the Yemeni Houthis' aggressions in the Suez Canal, have disrupted shipping routes, prompted giants like Maersk to reroute, and increased the expenses and logistical complexities for perishable goods. With paper scarcity as a dominant price driver, Jaramillo, while not predicting as severe a scenario as two years prior, does anticipate early-year logistical disruptions.

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According to the article by Procurement Resource, the global cardboard prices are expected to significantly rise in 2024. The cardboard industry, after a price drop in 2023, prepares for a hike due to US and European market trends, Panama Canal transit issues, and geopolitical unrest affecting Suez Canal shipping, impacting costs and logistics.