Newspaper Industry Crisis – Shortage in Newsprint in India

Newspaper Industry Crisis - Shortage in Newsprint in India - Economy Simplified
Newspaper Industry Crisis

The newspaper you are reading Daily is facing a huge problem due to an increase in the cost of Newsprint Material. There are a series of events attached to it and the final blow was the Russia – Ukraine war.

India Consumes 2.2 million tonnes Per annum of Newsprint in a year and from which 1.5 million tonnes per annum is been imported. Out of which Russia accounts for almost 45% of Indian Newspaper Print material Imports and due to the war between Russia and Ukraine the Newspaper Materials are been pilled on the Russian Port but Due to Global sanctions & Security issues Shipping companies are not able to deliver this product.

Russia is also the major exporter of newsprint globally and exports most to India. The Leading buyer in India from Russia is Dainik Bhaskar Corp Ltd which runs 66 editions in four languages, Jagran Prakashan Limited, and Lokmat Media Pvt Ltd

The 30% of the cost of newsprint production is Electricity and due to the rise in natural gas & coal prices Newspaper Industries were already in a problem.

This is the classic case of the Law of Demand and Supply

Most of the newsprint materials supply is been disrupted and there is the sudden Shortage of this Paper Russia Ukraine war is not the only reason behind it but there are a series of events that lead to this crisis.

Reason Behind the Shortage : 

  1. UPM Strike – Since January, workers have been on strike at UPM – a large newsprint Manufacturer in Finland that accounts for nearly 60% of Indian Imports of the Glossy Newspaper.
  2. Canadian Truckers Strike – In February, Canadian Truckers went on a Strike against vaccine Mandates, Wreaking havoc with crucial supply chains. Canada usually accounts for 40% of Indian Newsprint Imports.
  3. Covid Pandemic – For the past 2 years Covid pandemic has affected all sectors and ravaged many industries and economies around the world and the newsprint Industries are no Exception.
  4. Logistical Challenge – Global supply chain has suffered logistical disruptions for more than two years now as cargo containers are in huge shortage.
  5. Increase in Ocean Freight Cost – The ocean Freight cost has shown an increase by 4 times in the past two years
  6. Other elements – Ink for printing and transportation costs are also becoming more expensive due to the global surge in commodity prices, exerting further pressure on newspaper costs.

Domestic Manufacturers Problems :

  1. Indian Newsprint Mills converted to Packaging materials – There is a supply crunch in India too as several domestic newsprint manufacturers have converted their mills to produce packaging materials due to a large volume Growth in e-commerce in India.
  2. Acute Shortage of recycled fibers – Only a handful of Indian mills continue to produce newsprint. Even these mills are facing an acute shortage of recycled fiber which is sourced from old newspapers and sorted official papers and is a critical input in the production of newsprint. Waste paper generation collapsed during the successive waves of covid and traditional collection and sorting systems of recycled paper are still in disarray.
  3. High Cost of Company Setup – Manufacturing Newsprint Approximately takes 1500 Kilowatts of energy and 20,000 liters of water so it is not viable for people to put up industries for newsprint in India.
  4. Quality of Newsprint doesn’t match with global standards – There are a few reasons for it Firstly Quality of input is low with Low-quality Raw materials and secondly, Equipment and method used are old.

How the Newspaper is Recycled :

Old Newspapers and Office Papers are been collected and been send to Deinking Plant which later is processed and New Paper is created.

Newspaper Industry Crisis - Shortage in Newsprint in India - Economy Simplified

The implication of Newsprint shortage :

  1. The price of imported newsprint has already doubled from $450 Per Ton in 2019 to about $950 per ton in April 2022.
  2. As Already the majority of readers are turning toward the online print media the traditional Newspaper companies are facing a shortage of readers 
  3. Newspaper Companies cannot increase the price of the newspaper as already there is a shortage of readers and if they increase the price there will be the conversion of the major source of an audience to the Digital media causing more harm to the Newspaper Companies.

WayForward :

Reduce Custom Duty: There is a 5% of Customs duty on newsprint which is represented by the newspaper industries to Govt of India to Remove it which will be of great relief for newspaper industries.

Reference: Newslaundary

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