High costs hitting Indian paper exports to China

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Bales of OCC cardboard for recycling
Bales of OCC cardboard for recycling

Indian exports of pulp and paper to China have been hit by high manufacturing and raw material costs, the Federation of Corrugated Box Manufacturers of India (FCBMI) has said.

As reported by Financial Express, FCBMI revealed that exports of finished paper products from India to China had reached 150,000 tonnes per month, but this had dramatically dropped.

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The reasons for this were high electricity costs due to a three times increase in the price of coal, high prices of OCC, and a seven-fold increase in container freight charges.

Indian mills had also been hit by rising local OCC costs, and not just the import price, as well as diesel price rises increasing the cost of domestic freight.

According to FCMBI president Milan Kumar Dey, China’s own electricity crisis had “created a sense of optimism in Indian markets” but high production costs had turned “the situation grim”.

China had previously been buying Indian paper and cardboard to make up for the shortfall created by its import ban that began at the start of this year.

However, demand had dropped dramatically from China for finished paper and pulp from India’s 600 mills.

India also recently accidentally banned imports of paper and cardboard from the EU for a short period.

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