The price of newsprint has fallen by almost 30%, a huge relief for the printing industry. It was a major concern in the previous financial year. Experts in the industry believe the price reduction is due to the decreased global demand for this paper.
According to sources the price of Newsprint has dropped from $1000/tonne to about $700.
In its official Q4 statement, DB Corp Ltd stated that newsprint continued to decline in Q4 FY2023. This helped margins in the quarter and will likely bring more benefit in future quarters.
“Newspaper newsprint prices, from a high of Rs 63,500/tonne in Q2 FY2023, have come down to Rs 60000/ tonne in Q4 FY2023. Our blended purchase price currently is around Rs 55000/tonne,” it said.
Speaking to exchange4media, Matrubhumi Group’s Managing Director Shreyams Kumar, said, “The reason for the prices coming down is lower consumption level across the globe due to Covid and it has not recovered fully since that time. But it is on the path to recovery.”
“I think the consumption of newsprint in India went down by 40% during Covid. The custom duty is the same but there are rumours that the government is planning to cut it down.”
Amitchopra, Joint MD at Punjab Kesari also shared the same view. The price reductions are due to a decreased global demand as well as an improved logistical situation. This will lead to increased profitability.
“The price reduction has been going on since mid-last year. It is not an increase in sales but a decrease in printing costs. It will therefore improve profitability.
“The price reduction is due to reduced global demand and improved logistic situation. Prior to this, freight costs had risen dramatically due to the disruptions caused by covid. The customs duty is unchanged. Dollar has only become more expensive since last year,” Chopra said.
Kumar however said that this price reduction will only be felt during Q1 of next year’s financial year.
“Currently the price is 700 USD per tonne. It is only by reducing the cost of printing that the revenue can be increased. We import newsprint in bulk and store it.
“The prices have come down only during the last quarter so the effect of this price drop will show only in Q1 of the next financial year,” he said.
The disruption in the supply chain for newsprint caused by the Russia-Ukraine conflict, combined with the scarcity of recycled waste paper led to prices reaching $1000/tonne as early as 2022.
Prices have dropped from $1000 down to $850-900, and now down to $700.
Varghese Chandy, Vice-President, Marketing and Sales at Malayala Manorama had a completely different view of the situation.
The cost of newsprint, he said, has increased by almost 90% in the past four and a half years. With the dollar’s value at an all-time high, a reduction in the price of newsprint is not possible.
“It was as high as $1050 per tonne last year and it is only $900 now. The price of newsprint increased by 90% in the last four or five years. The cost will not be decreasing. The cost is still high.
“Dollar exchange rate has also gone up considerably. I don’t think newspapers have surplus funds. No question of the newsprint price coming down,” he said.
Sources say that newsprint prices are expected to drop further to as low as $600/tonne by October of this year.
Chopra stated that Punjab Kesari will reduce the cover price of its newspaper by one rupee. The paper consumes between 30-32000 tons of newsprint each year.
“High newsprint prices resulted in hiking of cover prices. Punjab Kesari group is passing on the benefit of reduction to readers by reducing cover price on some days by a rupee from 5 to Rs 4,” he told exchange4media.
According to industry participants, the top newsprint price in 2022 will be $1000/tonne. This is up from $450/tonne between Jan-March 2020.