Serious shortage of paper, the Indian newspaper publishing industry was hit hard, forced to reduce the layout, cancel the special issue!

Serious shortage of paper, the Indian newspaper publishing industry was hit hard, forced to reduce the layout, cancel the special issue!

In India, a severe shortage of newsprint has forced several newspapers to reduce page size, cut editorials and cancel weekend publications and special editions, while others have raised advertising prices or used paper so thin that readability suffers. Newsprint, a low-quality paper made from wood pulp or recycled waste paper, has a shortage of several years ago, but has been exacerbated by a number of interrelated factors globally and within India over the past few years. question. Supply chain disruptions and price hikes caused by the Russian-Ukrainian war have added urgency to the crisis.

According to data available on the Indian Newsprint Manufacturers Association (INMA) website, India's demand for newsprint is about 2.2 million tons per year, but 68% of the demand, about 1.5 million tons per year, is met through imports, mainly from Canada and Russia. This reliance on imports has also resulted in a more than 50% reduction in domestic capacity utilization in India, the website said. Of the 125 paper mills registered in India, only 46 are operating. Although the new crown epidemic and war have affected the supply chain and the global newsprint price has risen, domestic manufacturers have also increased the corresponding paper price.

Ironically, at a time when newspaper circulation is recovering after the 2020 coronavirus lockdown led to mass layoffs, newspaper closures and reduced print runs, the newsprint problem has intensified. One aspect of the problem, as a report in the Times of India pointed out, is the lack of scrap newspapers that make new newsprint.

A source in the I&B department said that while "deliberation" was under way, a long-term solution to the newsprint problem had yet to emerge. Interview industry experts to learn the truth about the newsprint 'crisis', why domestic mills are unable to meet demand, and what can be done to help alleviate the problem. Experts agree that the current problems stem at least in part from another newsprint crisis five years ago.

'Paper dumping' leads to lower domestic production

Just like now, a few years ago, the print media industry was overwhelmed by the looming newsprint crisis. The reason at the time was a 40% increase in newsprint prices in 2017-2018 due to rising raw material costs and China's ban on imported waste paper. At the time, cheap newsprint imports from countries like Canada, Russia and Finland saved publishers' fortunes but angered domestic newsprint producers.

According to the Indian Newsprint Manufacturers Association (INMA), these countries started "dumping" their surplus products to India at one-off prices, which became cheaper thanks to special duty exemptions for newsprint imports. Vijay Kumar, secretary-general of INMA, said this hit domestic production hard. "Foreign firms take advantage of domestic overproduction and depleted demand to dump in India at non-competitive prices, thereby making Indian production commercially unviable."

Explaining other dynamics affecting domestic production then and now, Vivek Chora, CEO of the Paper Mills, said: "In the past four years, we have never been able to utilize our total capacity of 140,000 tons of newsprint, Because of the lack of stable orders and scarce supply of raw materials.”

Due to low domestic demand for newsprint and insufficient supply of raw materials such as waste paper, many paper mills have ventured into producing other types of paper, such as packaging paper. Furthermore, he claimed that it was a challenge to set competitive pricing as the selling price of newsprint was not related to the main imported waste paper raw material, but to the landed cost of finished newsprint imported into the country.

"The answer lies in predicting the demand for newsprint by large consumers, because the lead time for purchasing imported waste paper is four to six months. The selling price needs to be in line with the cost of raw materials, which are committed to four months before delivery," Wei said. Vic Jorah added. At the same time, journalism has not been able to enjoy a supply of cheap newsprint for long.

New taxes, rising global prices, domestic producers 'profiteering'

In Budget 2019, the Indian government announced a 10% tariff on newsprint, again leading to concerns about the need to scrape pages from newspapers and increase cover prices. When the Covid-19 outbreak sent newspaper id circulation plummeting, the cost of newsprint increased, making higher paper costs even more unsustainable for publishers.

The situation eased when the tariffs were reduced to 5% in 2020, but the Press Association of India (INS), the central organisation for the country's media, pleaded for a stimulus package that year, with exemptions falling on deaf ears in 2021. In addition, the Directorate General of Trade Remedies (DGTR), which is part of the Ministry of Industry and Commerce, launched an "anti-dumping investigation" into newsprint imports following complaints from newsprint manufacturers.

In January 2021, it proposed a five-year anti-dumping duty on newsprint from Canada, Russia, Australia, Singapore, the European Union and the United Arab Emirates to protect domestic producers from cheap imports. While this suggestion has not yet been fully realized, another international trend has materialized: Importing newsprint is not so cheap anymore.

By 2021, the cost of newsprint worldwide will start to rise sharply. After sluggish demand for print media during the pandemic, paper mills began to diversify into other areas and no longer produce newsprint. Then, demand for newsprint has far outstripped supply.

As a report in The Economist put it: "Economy reopens. Newsprint demand soars. Combined with significantly reduced capacity, and soaring energy prices ... causing price shocks." By June of that year, newsprint prices had jumped from 2020 The annual price of less than $300 per ton has risen to $700 per ton.

Then, the conflict between Russia and Ukraine made things worse by increasing energy costs and disrupting supplies of raw materials, and paper prices soaring. The impact is also being felt in India, where the Russian market, which used to account for 45% of imports, has suffered, newsprint imports have become a problem, and supplies have been disrupted in Canada and Finland due to earlier strikes. At the same time, domestic prices rose to match international prices.

Mohit Jain, president of the Press Association of India, said: "The historic increase in domestic newsprint prices, matching today's international prices, is clearly profiteering. Imported newsprint is around $1,000 a tonne. , domestic offers were at a similar level, and even after that, there was a severe shortage and an additional 5% duty on imported newsprint.”

INMA's Vijay Kumar claims the problem doesn't just apply to paper. "I think supply chain disruptions caused by the pandemic are one of the main reasons for this crisis, and shipping prices have spiked. It's not just newsprint that's been shaky to the recovery, it's all essential commodities," he said.

Increase advertising costs, and carry out waste sorting to improve waste paper recycling rate

INS had proposed to the Ministry of News and Broadcasting (I&B) last month that advertising rates in newspapers should be revised or increased to allow for the inflow of funds. They also sought to lower import tariffs again. “INS has asked advertising companies to increase advertising rates for print media by at least 20%, as many advertisers have already raised product prices to consumers. This is very urgent as publishers cannot afford the full amount due to chronic hyperinflation cost burden, and a baseline revision of advertising rates is unavoidable," Mohit Jain said.

The paper industry is also looking for ways to fill the gap between supply and demand. According to INMA's Vijay Kumar, there is currently a need to prioritize proper waste sorting so that domestic paper mills can more easily source waste paper. “We need a system that allows us to work with government projects like Swah Bharat Abyan and increase the amount of waste paper in industries like ours to better control production. Even today, 52% of waste paper ends up in landfills and only 48% is recycled. Because we don’t have a proper waste sorting mechanism, we tend to lag behind in the procurement of waste paper, an important raw material for newsprint.”