Poddar Global ships first newsprint vessel from Russia to resolve shortage in Indian newspaper industry

Poddar Global Private Limited is one of the leading importers, aggregators and distributors of newsprint and paper products in India for the last 36 years. The company boasts its own supply chain, warehouses and paper conversion facility on more than 300,000 sq ft in all major Indian port towns, viz. Mumbai, Chennai, Kolkata, Cochin and New Delhi, supplying standard newsprint and other publication papers to most of the leading Indian newspapers and magazines.

Over the last two years, the Indian newspaper industry has been facing a big challenge due to the shortage of newsprint supplies and steep increase in newsprint prices on account of COVID-19 and RussiaUkraine war. To ease out the supplies, Poddar Global shipped a chartered Break Bulk Vessel M/V LADA from Russia, which was arrived on June 5, 2022, carrying standard newsprint for supplying to various Indian newspapers. It is the first time after 25 years, Russia has loaded first break bulk vessel of newsprint and India is also getting for first time newsprint by break bulk after 25 years.

Russia accounts for almost 45 percent of Indian newsprint imports. Due to the Russia-Ukraine conflict, most of the major global shipping companies have stopped bookings to and from Russian ports, creating a logjam of containers.

Other fallout in this context is that the inflation of global energy prices, which include natural gas, coal, etc. constituting almost 30 percent of the cost of newsprint production at paper mills. The conflict is a big blow that has buffeted foreign newsprint exporters in quick succession.

Workers have been on strike at UPM, one of the world’s largest newsprint manufacturers in Finland that accounts for nearly 60 percent of Indian imports of glossy newsprint. Canadian truckers went on strike against vaccine mandates, wreaking havoc with crucial supply chains. Canada usually accounts for 40 percent of Indian newsprint imports.

Due to the disruptions, the ocean freight costs of newsprint to India have jumped four times in the last two years. An industry source mentions that the freight costs are likely to increase even further as the snapping of China-Western Europe rail links through the Eurasian region of Ukraine, Russia and Belarus is expected to add further logistical problems on already overstrained ocean routes from Asia to the West.

In India, several domestic newsprint manufacturers are converting their mills to produce packaging materials due to large volume growth in e-commerce.

Only a handful of Indian mills continue to produce newsprint. Even these mills in the domestic market are facing an acute shortage of recycled fibre, which is sourced from old newspapers and sorted office papers and is a critical input in the production of newsprint. Unfortunately, waste paper generation collapsed during successive pandemic waves. Traditional collection and sorting systems of recycled paper are still in disarray.

Newsprint typically amounts to about 40–50 percent of the cost of producing a newspaper. Other elements like inks, aluminium plates for printing, and transportation costs are also becoming more expensive due to the global surge in commodity prices, exerting further pressure on newspaper costs. The newspaper industry has made representations to the government for removing the 5 percent customs duty on newsprint, which would bring it much needed relief.

The scarcity in newsprint supplies has driven prices to unsustainably high levels. The price of imported newsprint was already doubled from $450/tonne in 2019 to about $950/tonne. Poddar Global has made all the efforts to bring the Break Bulk Vessel operations successful with high hope of this first vessel of newsprint from Russia will help the Indian newspaper industry to get regular flow of newsprint at reasonable prices.