With fuel, pulp and energy based production costs on the rise; as well an increased demand for paper in neighbouring Asian countries, Australia will most likely be hit with two or three more paper price increases before the year is out, according to paper merchants.
Spices Paper has announced a price increase of 4 to 6 per cent, which is expected to come into effect at the end of July.
Rohan Dean, marketing manager for Spicers says in the short term, price increases are likely to coincide with rising fuel costs, with the entire industry feeling the pinch.
Dean says, “I feel for the printers, they are just as affected as us. They will also have to put increases into the market; I just hope their customers will handle it.”
Raleigh Paper also announced a price increase of 5 per cent, which will come into effect July 21.
Craig Brown, general manager of Raleigh Paper commented saying apart from rising fuel, fright and manufacturing costs, price increases are inevitable due to a growing demand for paper in the Asia pacific region.
Brown says, “We may continue to see a rise over the next nine or ten months. There is a significant increase in demand for paper from Asian countries, specifically China as it develops. The price increase will slow once the demand in China slows.”
Brown also says that while mills were not using the increase for profiteering, they were attempting to make up lost ground from a steady decline in profits over the last five to seven years.
KW Doggett Fine Paper is also hiking prices, with a 5 per cent increase coming into effect July 21.
Simon Doggett, managing director of KW Doggett also agreed that paper prices would follow fuel and pulp costs, however he added additional problems could arise in currency changes.
Doggett says, “If the Australian dollar decreases against the US dollar it could put a lot of pressure on importing, but so far there has been no sign of this happening. The increases are driven from a lot of different areas. Everyone is expecting the increase but we are not in a position to absorb the cost.”
CPI was unavailable to comment at time of publication.
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