Cause For Concern: Newsprint Prices Start Inching Up Again

Newsprint prices, which had corrected majorly through 2009, has started inching up again after bottoming out at about $460 in August-September. The price for the ongoing October-December quarter is $550 and industry sources say it is expected to go up to $575-600 for the January-March quarter.

Through 2008, price of imported newsprint kept going up to touch $960, severely affecting the profitability of India’s print industry. Prices of Indian newsprint usually moves in line with international prices. Newsprint bill is usually the single largest cost component of newspaper publishers in India and hence the commodity’s price fluctuations have an inversely correlated impact on profitability. Newsprint prices have traditionally followed a cyclical pattern in the long term.

Harish Nagpal, AVP for production and materials at publisher HT Media Ltd, said three main factors were contributing to the price rise.

1) Waste paper, which is an important raw material in the manufactuing of recycled newsprint, has become more expensive.

2) Most currencies started depreciating against the US dollar, so exporting nations had to hike prices to make up for the depreciation in the local currency.

3) Freight costs are now higher. “Crude oil used to be $40 per barrel six months ago. Now it’s about $75-80,” Nagpal said.

He added that most publishers have started stocking up their inventory as prices are expected to continue on an upward trajectory.

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