India’s paper industry is expected to lose 100 billion rupees due to the outbreak
The outbreak of the novel coronavirus pneumonia poses a great threat to the world economy, of which India is no exception. Affected by the outbreak, the Indian government began to implement the first phase of the 21 day national blockade order on March 25. Such a strict blockade has affected all walks of life to a certain extent.
India’s paper production accounts for 4% – 5% of the total global paper production, and its domestic turnover is about 13 billion US dollars per year. During the outbreak, India’s paper industry has basically stagnated, and nearly all 850 paper mills in the country have been shut down, which is the most difficult time for the industry. In addition, the epidemic has brought not only economic impact, but also spiritual challenges. In addition, the world’s economic weakness and industry anxiety have increased.
Packaging industry is one of the most affected areas. About 38% of Indian paper packaging enterprises (including single box and corrugated box manufacturers) serve the pharmaceutical industry, 21% of which have been serving essential drugs. This kind of packaging enterprises are not greatly affected, but the rest of the packaging enterprises serve non essential industries such as FMCG, clothing, food packaging, luxury goods, etc. during the epidemic period, they need to We have to bear a lot of economic pressure. India’s packaging industry is estimated to have lost about inr40 billion in revenue due to the shutdown during the outbreak.
However, after the shutdown, the packaging industry is not at the bottom. The increase of e-commerce and food packaging quantity will inject new vitality into paper packaging. This trend is obvious in many countries around the world. In the United States, for example, e-commerce giants such as Amazon have been transporting goods and hiring new employees during the outbreak. Therefore, for India, the packaging industry will also mainly rely on e-commerce and food packaging consumption.
For paper for daily use, sales have increased in both developed and developing markets. For example, in Europe and the United States, there has been a rush to buy toilet paper, and demand has been rising. Demand for other non essential paper products is low, as is the case in India.
In addition, India will import additional coated paper from China and South Korea, because these countries have resumed production, while India’s domestic production capacity has stagnated. Therefore, with the gradual supplement of imported coated paper, the rising trend of the price of coated paper (C2S) will be controlled again. At present, a large number of imported coated paper has arrived at Indian ports. However, because coated paper is a non essential paper, in the first quarter and second quarter, the demand for coated paper in India will not be very large.
Influenced by many factors, the development of Indian printing and writing paper market is very slow in the near future. Among them, the consumption of copy paper has been stable, but the demand for larger size paper has declined significantly. Although the office has not really realized paperless, the development of digital platform has affected the consumption of printing and writing paper to a certain extent; and because of the closure of the school, the consumption of paper has also been impacted. India imports about 11000 metric tons of photocopy paper per month. In the next few months, the industry will be affected by domestic oversupply and insufficient demand.
In terms of waste paper, due to the stagnation of production in several waste paper supply countries, the supply of waste paper in developing countries is insufficient. By the end of the first quarter, it is expected that OCC from the United States and Europe will also be in short supply. In terms of market price, the price of waste paper in India increased due to the depreciation of Indian Rupee by 15% against the US dollar. However, due to the impact of the blockade on paper consumption, India’s waste products will not be recycled in a short period of time, so before May and June, the shortage of waste paper in India will not be fully alleviated temporarily.
In general, for the Indian paper industry, the outbreak will cause the industry to lose more than 100 billion rupees. If the blockade continues to be extended, the loss will continue. After all, it is the key to ensure the personal safety of residents during the outbreak.
Post time: May-15-2020