Paper mills in India have moved the prices up for paper amid falling profit margins

Recently, paper mills in India have raised prices across writing and printing paper grades by Rs. 3 to Rs. 6 per kilogram. This move comes as manufacturers face rising input costs and aim to ensure operational sustainability. Further price increases are expected, driven by steady demand, particularly with the upcoming notebook and publishing season. Mills are also reducing trade incentives, which may lead to additional upward pressure on prices in the near future.

The backdrop to this pricing trend lies in a combination of domestic and international challenges. Earlier in the year, prices of coated and uncoated paper categories fell by approximately 15% and 20%, respectively, from their peaks, with sharper declines in the second half. Concurrently, the cost of raw materials such as hardwood and softwood has surged, significantly increasing production expenses. Integrated manufacturers are grappling with negative margins, especially given the steep costs of imported wood chips.

Imports have further intensified competition, with increased volumes of uncoated woodfree and coated paper entering India from countries like China and Indonesia. While demand within India has grown, oversupply and subdued demand in other Asian markets have contributed to competitive pricing from imports. Exports, however, have remained relatively resilient. These factors collectively underline the pressures on the domestic industry and the rationale behind the recent and anticipated price hikes.