Pulp vs. Recycled Paper

"Did you notice?" A friend asked me recently, "We have reduced the number of pages in our newspaper". I had noticed not such thing.

Two newspapers get tossed on our balcony every morning and I had certainly felt that either of them was any lighter. The cost-cutting measure apparently had come about because the cost of newsprint had shot up 35 percent in the recent months.

This too had escaped my attention. What could possibly be the reasons for such a significant hike? A quick search on the net throws up the following facts:

• In 2016, the gobal demand for newsprint stood at nearly 24 mmT of which 10.6 mmT came from Asia.
• Yet, in terms of quality and value, US has always been the top market with the highest per-capita consumption of 200kg/year (India - just 13kgs)
• The global newsprint industry has been on a steady decline despite big-ticket mergers (eg. AbitibiBoWater Inc.) due to a steady decline in demand from the US market, which is declining 10%+ YoY.
• Decline in global demand, combined with fluctuations in cost of energy and transportation costs has resulted in the prices fluctuating from $320/T (2002) to over $1000/T. At present the prices hover around $770/T.
• Considering the fact that newsprint costs account for 55-65% o the total cost of producing a newspaper the future does indeed look gloomy for the newspaper industry.

However, the demand for newsprint in India has been rising steadily, thanks to increasing literacy rates and incomes. Yet the global sellers are not exactly rushing in because we are not yet willing to pay the rates they have been getting from USA and Western Europe. 

Also more recently, China, one of the major suppliers of newsprint decided to import pulp instead of waste-paper as a raw material for the the newsprint industry. While this move led to a fall in the prices of imported waste-paper, Indian mills have not been able to use them because all these years, thanks to the print-media lobby, zero-duty on newsprint imports had driven many Indian papermills out of business! 

One thing however remains unclear: If India is consuming about 2 mmT of newsprint every year, why is it not being recycled? Is the process way too expensive or does it go elsewhere? The going rate for used newspapers being collected by the local "Raddi-wala" is Rs.10/kg or Rs.10,000/T whereas newsprint is being imported at about $760/T (INR 50,000/T).

It seems only 20% of waste-paper in India is recycled, compared to over Germany's 73 %, Japan 60 %, Western Europe 56 % , the US 49% and Italy 42%. So much so that we imported USD 1 billion worth waste-paper for our mills in 2011. Surely there is a case for more efficient recovery and recycling in India?

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LINKS & REFERENCES

* 2016 - Global demand for Newsprint - https://www.statista.com/statistics/596561/worldwide-demand-for-newsprint-paper-by-region/

* 2018, March 18, The Print - https://theprint.in/governance/chinas-fight-pollution-torpedoed-indias-newspaper-industry/43008/

* 2018, 12 March, Mint - https://www.livemint.com/Companies/5nUNiHL3HBuPJ2vEBGXX4M/Newsprint-price-hikes-forcing-publishing-cos-to-rejig-practi.html

* 2018, Feb - India Paper consumption - https://www.asiapapermarkets.com/indias-domestic-paper-consumption-at-over-16-mtpa-with-imports-at-over-2-mtpa-demand-projected-to-grow-to-23-36-mtpa-by-2024-25/
- The domestic market / consumption of paper is over 16 million tonnes per annum (TPA), with over 2 million TPA being imported.

* 2018, Jan - BS - Rising costs of paper - http://www.business-standard.com/article/companies/paper-makers-raise-prices-by-2-5-across-segments-as-input-costs-pinch-118012000259_1.html

* Newsprint import policy - http://rni.nic.in/newsprin.html
- List of scheduled newsprint manufacturers/importers - http://rni.nic.in/listmills.html

* 2018 - Care Ratings - http://www.careratings.com/upload/NewsFiles/Studies/Paper%20Industry%20Report%202018.pdf
- India consumes about 18 mmT of paper every year which is about 4% o the global market

* 2015, FE - Wealth from Waste - https://www.financialexpress.com/opinion/wealth-from-waste/43315/

* Newsprint - https://www.lifewire.com/newsprint-in-printing-1078129