Paper companies look to raise prices by up to 8 per cent following the steep rise in coal and wood prices. Prices of wood, the key raw material for quality paper manufacturing, have gone up by 25 per cent over the last one year. While the industry is still struggling with the rise in wood prices, the recent upward revision in prices of coal ranging from 30 per cent to 80 per cent for different grades will definitely put pressure on paper prices in the domestic market. While the industry requests the government to review the steep hike in coal prices, it is forced to pass on the increase by raising prices by 6-8 per cent.
The increase in raw material costs will erode the price competitiveness, which is already experiencing onslaught of imported paper. With economic slowdown in developed economies, export-dependent economies such as China and Indonesia have found India an easy outlet for their excess capacity. The low import duty of 10 per cent levied by India comes as an incentive.
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