Printed newspapers in India now hit hard by rising newsprint cost
In the past few months newsprint price in India had been shot up by 20 percent. It is likely to go further another 10 percent in near future. Such price hike of newsprint has brought printed newspapers, which are now struggling to recover from the pandemic slowdown, into a deeper trouble.
In 2020, newsprint prices were below US$300/tonne. Now it touches to nearly US$500/tonne. The increased price is expected to rise by another US$100/tonne in the coming months. The major drawback in the overseas market is that some of the leading paper mills which exported newsprint to India have either shut down or switched to new businesses during the pandemic period. Such situation in the market caused imbalance in supply-demand and mayhem in newsprint prices for Indian buyers.
Due to the COVID-19 crisis, newsprint consumption amongst news publishers throughout the year 2020 was quite low. But it started recovering bit by bit in the Q4, though it was far below when compared to the same period in 2019. In the pre-pandemic period newsprint consumption in India was around 2.5 -2.7 million MT per annum. It was drastically gone down during the peak pandemic times.
Even in the 2021 Union Budget, no relief was announced for the newspaper industry in terms of waiving import duties on newsprint. Nearly 60 percent of costs of a newspaper publisher go into acquiring newsprint. With the steep increase in newsprint cost, publishers are now left with no option but to increase the newspaper cover prices.
In comparison, smaller media houses are worst hit by the 20 percent hike in newsprint than their bigger counterparts. Though many regional newspapers use mix of indigenous and imported newsprint, they are pushed to invest at least around 20 percent extra due to the increased newsprint price. Many of them comment that the situation is as bad as it was in the peak pandemic time. The hope is that it may come to normalcy in the next few months.
In response to the crisis of newsprint price hike, most of the printed newspapers are now looking forward to using indigenous newsprint. As their attempt to cut production cost, many publishers adopt new strategies such as reduction in pages without compromising on news quantity and quality. However, some market analysts say the situation is now improving as the market started witnessing recovery in Q3 FY 2020-21, though the figures are still below the level recorded in the pre-pandemic period. In another effort to rationalise production costs, many publishers keep reviewing their processes and practices for optimization and automation. They keep the operations as lean as possible.
As a move to manage the crisis, publishers in India switching to indigenous newsprint may not be a viable solution, because Indian mills can’t produce newsprint of lower grammage, as low as the imported ones. Most of the newsprint from the overseas mills are of 42 gsm and below. Most of the Indian mills can’t maintain such quality as of now. Apart from the quality of newsprint, Indian mills can’t meet the volume of newsprint which newspaper houses keep demanding.
On the other side, the good news is that industry experts observe that shortage in newsprint supply and increasing cost is a short to medium term situation.