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News, but no paper: India has a huge newsprint problem, but it’s been brewing for a while

Many newspapers have had to resort to thinner editions, higher cover prices, and shorter op-eds to deal with a shortage of newsprint. The Russia-Ukraine war just made it worse.

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New Delhi: There’s a glut of news and opinion across Indian media, with one exception: print. Due to a severe shortage of newsprint, several newspapers have been forced to reduce their pages, pare down editorials, and do away with weekend glossies and special editions. Others have increased cover prices or are using paper so thin that readability is compromised.

A shortage of newsprint — a low-quality paper made from either wood pulp or recycled wastepaper — is a problem that has arisen before, but it has been exacerbated by a number of interrelated factors, global and domestic, over the past couple of years. Supply chain disruptions and price hikes due to the Russia-Ukraine war have just made the crisis more urgent.

The figures presented on the website of the Indian Newsprint Manufacturers Association (INMA) show that India’s demand for newsprint is at around 2.2 million tonnes per annum, but a staggering 68 per cent of this demand (1.5 million tonnes per annum) was met by imports — predominantly Canada and Russia.

This dependence on imports, the website says, has also led to domestic capacity utilisation reducing by more than 50 per cent. Out of 125 registered paper mills in India, only 46 are operational. While Covid and the war have affected supply chains and newsprint prices have increased the world over, domestic manufacturers, too, have upped their price tags

Ironically, the newsprint problem has intensified at a time when newspaper circulation figures have been witnessing a recovery after the demand-killing 2020 Covid lockdown, which had led to mass layoffs, newspaper closures, and reduced print runs. As one Times of India report pointed out, one aspect of the problem is there is a shortage now of old newspapers to make fresh newsprint.

A source in the I&B Ministry told ThePrint that a long-term solution to the newsprint problem isn’t in sight yet although “deliberations” are under way.

ThePrint spoke to industry experts to get to the bottom of the newsprint “crisis”, why domestic paper mills are not able to meet demand, and what measures could help mitigate the problem. What experts agree on is that the current issue is at least partly rooted in another newsprint crisis from five years ago.


Also Read: Newspapers went on a strike in New York in 1945. But journalists were not missed


‘Paper dumping’ led to reduced domestic production

Much as it is doing now, the print media industry was wringing its hands a few years ago because of a looming newsprint crisis. The reason at that time was a 40 per cent hike in the price of newsprint between 2017 and 2018 due to increasing raw material costs and China banning imports of wastepaper.

What saved the day back then for publishers, but enraged domestic newsprint producers, were cheap imports from countries like Canada, Russia, and Finland.

According to the Indian Newsprint Manufacturers Association (INMA), these countries took to “dumping” their surplus products into India at throwaway prices, made even cheaper due to special duty exemption for newsprint imports.

Speaking to ThePrint, INMA secretary-general Vijay Kumar said this hit domestic production badly. “Foreign players took advantage of their overproduction and depletion of demand in their own country by dumping in India at non-competitive rates, thus making Indian production commercially unviable,” he added.

Explaining the other dynamics affecting domestic production then and even now, Vivek Chawla, CEO of Emami Mills, told ThePrint: “In the past four years, we have never been able to utilise our total capacity of 1.4 lakh tonnes of newsprint for a lack of consistent orders and scarce raw material availability.”

Because of low demand for domestic newsprint and low supply of raw materials like wastepaper, many paper mills have branched out into manufacturing other kinds of paper, such as for packaging.

Further, he claimed, instituting competitive pricing was a challenge since the selling price of newsprint is not linked to the raw material (in this case wastepaper), which is mainly imported, but to the landed cost of finished newsprint imported into the country.

“The answer lies in forecasting the demand for newsprint by the large consumers, since the lead time to procure imported wastepaper is four-six months. The selling price needs to be aligned to the raw material cost, which is committed to four months before the delivery,” he added.

Meanwhile, the news industry could not enjoy its supply of cheap newsprint for very long.

New tax, rising global prices, domestic producers ‘profiteering’

In the 2019 Budget, the Indian government announced 10 per cent customs duty on newsprint, leading, yet again, to fears that pages would need to be shaved off the papers and cover prices hiked.

When Covid hit and circulation plummeted, the addition to newsprint costs made the higher cost of paper even more unsustainable for publishers.

There was some relief when the customs duty was reduced to 5 per cent in 2020, but implorations from the Indian Newspaper Society (INS) — which acts as a central organisation for the country’s press — for a stimulus package that year and a waiver in 2021 went unheeded.

Representational image of newsprint at a printing press | Commons

Further, following complaints from newsprint manufacturers, the Directorate General of Trade Remedies (DGTR), which is a part of the Ministry of Commerce and Industry, initiated an “anti-dumping investigation” into newsprint imports.

In January 2021, it recommended the imposition of an anti-dumping duty for five years on newsprint from Canada, Russia, Australia, Singapore, the EU and the UAE to safeguard domestic producers from cheap imports.

That hasn’t come to pass just yet, but another international trend did: imported newsprint wasn’t so cheap any longer.

By 2021, costs of newsprint the world over started increasing steeply. In the wake of depressed demand for print media during the pandemic, paper mills had started diversifying into other areas and were no longer churning out newsprint. And then, demand overtook supply.

As a report in the Economist put it: “[E] economies reopened. Newsprint demand shot up. That, combined with much reduced capacity and coupled with soaring energy prices… resulted in a price shock.”

By June that year, newsprint prices went up to $700 per tonne, from less that $300 per tonne in 2020.

Then, the Russia-Ukraine conflict made a bad situation worse — paper prices soared thanks to increased energy costs and supply disruptions in raw materials.

The reverberations were felt in India too. Newsprint was no longer readily available from major exporter Russia (which accounted for about 45 per cent of imports, according to reports) and there were disruptions in supply from Canada and Finland, too, due to strikes. Meanwhile, domestic prices rose to match international rates.

“Domestic newsprint prices have seen a historic increase to match international prices today — which is clear profiteering,” Mohit Jain, president of the Indian Newspaper Society, told ThePrint.

“The price of imported newsprint is about $1,000 per tonne. Now, domestic is being quoted at similar levels and even after that there is an acute shortage. Imported newsprint has the additional burden of 5 per cent customs duty. This duty was levied when the prices of newsprint were at $450 per tonne,” he added.

INMA’s Vijay Kumar claimed that this issue did not apply to paper alone. “I think the supply chain disruption [due to Covid] is one of the major reasons for this crisis and the shipping prices have also surged. It is not just newsprint whose recovery is volatile but all necessary commodities,” he said.

Upping advertising rates to waste segregation: A scramble for solutions

The INS had proposed to the Ministry of Information and Broadcasting (I&B) last month that advertisement rates for newspapers should be revised or increased so that there is a fund inflow. They also again sought a reduction in the customs duty on imports.

“The INS has asked advertising agencies to increase their advertising rates by a minimum of 20 per cent for print media, as many advertisers have already increased the price of their products to the consumers. This is quite urgent as publishers are unable to absorb the entire cost burden due to prolonged hyperinflation and a baseline correction in advertising rates is inevitable,” Mohit Jain said.

The paper manufacturing industry is also looking at ways to fill the demand-supply gap. According to Vijay Kumar of INMA, the need of the hour is to prioritise proper waste segregation so that domestic mills can procure wastepaper more easily.

“We need a system wherein we collaborate with government programmes like Swachh Bharat Abhiyan and increase the volume of wastepaper for industries like ours to get a fine grip on production,” he said. “Even today, 52 per cent of waste paper ends up in dumpyards and only 48 per cent is returned for recycling. Since we don’t have a proper waste segregation mechanism, we tend to fall behind in the procurement process of wastepaper, which is an essential raw material for newsprint.”

(Edited by Asavari Singh)


Also Read: Lesser Covid curbs have helped India manage Russia-Ukraine war price pressures


 

 

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