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Badal Sanyal

KOLKATA. June 18

ENTHUSED by the sharp rise in prices of all varieties of paper and paperboard in the international market, integrated large paper mills in the country have adopted an aggressive marketing strategy to augment exports.

And in the process, these mills do not seem to be averse to cutting down their normal supplies to the trade. Incidentally, all the paper mills have jacked up prices on average by Rs 750 per tonne on all varieties of paper in the last fortnight.

Local paper trade sources indicate that most large paper mills have already cut down on an average 50 per cent of their delivery quota to distributors and wholesalers on the plea that they do not have the capacity to supply full quota after taking care of the export commitments. Available information indicates that the large mills may have plans to export over 2 lakh tonnes of paper out of their total combined production of about 15 lakh tonnes during the current fiscal.

The export marketing strategy of the large paper mills allegedly has created a fear psychosis in the market, as many leading paper traders are apprehending that there may be shortage of paper in the country, although the demand for writing and printing paper is not increasing the way the market sentiment was developing.

The medium and small paper mills, which jointly produce about 30 lakh tonnes of paper per annum, have reason to feel happy at the tight supply position, as they are also getting the opportunity to increase prices after a gap of three years.

Since paper and paper products have been brought under open general licence (OGL), domestic paper prices will continue to fluctuate in conformity with the change in prices in the international market.

It is thus to be seen how the domestic paper market behaves in case a section of domestic newsprint manufacturers shift certain percentage of their capacities from producing newsprint to writing and printing paper.

It may be mentioned that the domestic newsprint-manufacturing sector is mostly in the red owing to international newsprint prices being at low levels.

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