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Paris (AFP) – The price of paper has skyrocketed since the beginning of the year: Manufacturers have at times doubled their prices, prompting fears of massive increases in consumer products, from back-to-school notebooks to toilet paper.
Why is the price of paper rising?
With the resumption of consumption after the lockdown, the demand for paper increased sharply and suddenly, which caused difficulties in the supply of raw materials and transportation.
In April, pulp, the raw material for paper and cardboard, was 40% more expensive than in the same period in 2019, before the pandemic, according to INSEE.
Moreover, “wood has become scarce, so product pallets are becoming scarce,” says Thibault Le Monnier, CEO of the French subsidiary of British paper and packaging group DS Smith Packaging.
He also mentions a delay in commissioning new machines due to a shortage of semiconductors.
In an industry that takes a lot of energy to dry pulp and run the machines that make up the plates, the rising cost of gas or electricity since the start of the war in Ukraine is also having a big impact.
Added to this are specific problems depending on the type of paper: for newsprint, higher prices are partly related to lower production, with producers abandoning the sector in the face of declining newspaper sales.
On the other hand, for corrugated paper used to make boxes, the prices are driven by the increasing demand for packing boxes intended for e-commerce or for the food industry, which is trying to abandon single-use plastics.
What are the consequences of this increase?
The situation is sometimes tense for manufacturers, but they have been able to pass on price increases to their customers in the face of rising costs.
“In general, companies have managed to maintain their profit margins,” stresses Paul Antoine Lacour, general delegate of the French Confederation of Paper, Cardboard and Cellulose (Copacel).
But this inflation has a downstream effect on all sectors of users, that is, a large part of the economy, from the press to hygiene papers, including food packaging and cartons of all kinds.
This rise in prices makes Mr. Lacour fear a “declining consumption” if the purchasing power of the French declines significantly.
Will school supplies prices rise with the beginning of the school year?
Like all paper producers, notebook manufacturers face rising costs. The peculiarity of this sector is that it negotiates selling prices with mass distribution in the fall for the next academic year: so the prices for the next academic year were set at a time when the price of paper had already risen, but still far from the current one. records.
According to Mr. LaCour, distributors have committed to a 12-15% increase in the purchase price of September 2022 paper school supplies, which could also drive up the price on shelves for the consumer.
“Since then, we have seen significant increases in a lot of production costs. If the negotiations took place today, we would be in much higher amounts,” he said.
And toilet paper?
Michel-Edouard Leclerc, head of the strategic committee for supermarkets E. Leclerc, warned in April that the price of toilet paper “will rise significantly”, during an interview on BFMTV.
According to manufacturers, toilet paper production is already 20% more expensive than it was before the pandemic.
“But in practice, the price increases are likely to be lower,” said Paul-Antoine Lacourt.
Unlike newsprint or cardboard, which is sold to businesses to be turned back in, toilet paper is sold directly to distributors, and thus to the end consumer, making price increases more difficult, he explains.
It’s also an essential component, so price negotiations can be tense.
© 2022 AFP