The price of newspaper, which had been a concern in the previous financial year, dropped nearly 30%. Experts in the industry believe the price reduction is due to a reduced demand worldwide for newsprint.
Sources claim that the cost of newsprint has dropped from $1000/tonne in the previous financial year to $700.
DB Corp Ltd in its official Q4 statement stated that newsprint continued its downward trend during Q4 FY2023, aiding margins. It is expected to provide higher benefits in the following quarters.
“Newspaper newsprint prices, from a high of Rs 63,500/tonne in Q2 FY2023, have come down to Rs 60000/ tonne in Q4 FY2023. Our blended purchase price currently is around Rs 55000/tonne,” it said.
Speaking to exchange4media, Matrubhumi Group’s Managing Director Shreyams Kumar, said, “The reason for the prices coming down is lower consumption level across the globe due to Covid and it has not recovered fully since that time. But it is on the path to recovery.”
“I think the consumption of newsprint in India went down by 40% during Covid. The custom duty is the same but there are rumours that the government is planning to cut it down.”
Amit Chopra (Joint MD of Punjab Kesari) shared a similar opinion. He said that the reduction in price is due to lowered global demand, improved logistics and will increase profitability.
“The price reduction has been going on since mid-last year. This is more of a cost reduction than an increase in sales. This will increase profitability.
“The price reduction is due to reduced global demand and improved logistic situation. Prior to this, freight prices had risen dramatically due covid interruptions. The customs duty is unchanged. Dollar has only become more expensive since last year,” Chopra said.
Kumar however said the impact of this drop in price will not be felt until Q1 of the following financial year.
“Currently the price is 700 USD per tonne. It is only by decreasing the price that the printer can reduce the costs. Normaly, we import newsprint and maintain a supply.
“The prices have come down only during the last quarter so the effect of this price drop will show only in Q1 of the next financial year,” he said.
A disruption of the newsprint supply chain due to war between Russia and Ukraine, coupled with a shortage of the waste paper that is used for recycling has led to a price of $1000/tonne by 2022.
Prices have dropped from $1000 down to $850-900, and then $700.
Varghese Chandy, vice president, marketing and sales, Malayala Manorama had a completely different view of the situation.
According to him, newsprint prices have risen nearly 90% over the past four years. And with the current dollar rate at an all-time high, there is no sign of a reduction.
“It was as high as $1050 per tonne last year and it is only $900 now. The price of newspaper has increased by 90% in the past four or five years. The cost will not be decreasing. Costs are still high.
“Dollar exchange rate has also gone up considerably. I don’t think newspapers have surplus funds. No question of the newsprint price coming down,” he said.
Sources claim that the price of newsprint will drop even further in October to $600/tonne.
Chopra explained that Punjab Kesari would pass the savings on to its readers, by cutting cover prices by one rupee.
“High newsprint prices resulted in hiking of cover prices. Punjab Kesari group is passing on the benefit of reduction to readers by reducing cover price on some days by a rupee from 5 to Rs 4,” he told exchange4media.
According to players in the newsprint industry, top prices for 2022 are expected to be $1,000/tonne. The previous highest price was $450/tonne from Jan-March of 2021.