Packaging cost to rise in the post-Covid era
Many sectors across nations are experiencing challenges due to the ongoing COVID-19 pandemic. The disruption in the supply chain has been tremendous due to lockdown imposed by countries all across the globe to mitigate the risk of spread of coronavirus.
One of the industries facing challenges amid the COVID-19 crisis is corrugated packaging industry. It is expected that the costs of kraft paper and other writing paper are expected to increase sharply post the Covid-19 lockdown due to huge shortage of waste paper and high penalty levied on consignments of imported raw material lying at ports. Kraft paper is generally used for making cardboard and packaging boxes.
India mostly depends on imported waste paper for producing kraft and writing paper. After the Covid-19 pandemic, most developed countries are either burning waste paper or using it for landfill to avoid the spread of coronavirus. This has resulted in huge shortage of raw material for Indian paper mills.
Sunil Agarwal, president, Gujarat Paper Mills Association, said kraft paper prices will skyrocket in coming days due to shortage of waste paper availability both in India and abroad, coupled with additional cost burden. The price of waste paper mainly determines the price of finished paper. After a 30 per cent fall in waste and kraft paper prices last year, it was been hiked 20 per cent gradually since January, even as demand slowed down partially.