War-driven raw material costs push up paper prices, hit packaging industry

Indore: Rising prices of imported wastepaper, coal and chemicals amid geopolitical tensions in West Asia are pushing up kraft paper prices, increasing packaging costs for sectors such as FMCG, pharmaceuticals and food processing.Industry representatives said that the ongoing conflict has disrupted global supply chains, leading to higher freight costs, uncertainty in shipping routes and volatility in commodity markets.Paper mills that manufacture kraft paper and duplex board, widely used in corrugated boxes and cartons, have already increased prices by around Rs 3 to Rs 4 per kg in recent weeks due to rising input costs.MP Corrugated Boxes Manufacturing Association president Swadesh Sharma said that the rise in paper prices was directly affecting packaging manufacturers. "Prices of corrugated boxes have increased by about Rs 3-4 per kg, which has led to a rise of at least 10 percent in the cost of corrugated boxes. Dispatches to customers are also getting delayed due to slower availability of raw materials from paper mills," Sharma said.The paper industry depends heavily on imported wastepaper as a key raw material. However, industry sources said prices of imported wastepaper have increased in recent weeks due to higher freight charges and uncertainty in global supply chains.Energy costs are also rising, adding further pressure on production. Market sources said prices of imported coal, widely used by paper mills for boilers and power generation, have increased by around Rs 2 to Rs 2.5 per kg.Anupam Agrawal, a paper trader based in Indore, said mills were becoming cautious in taking new orders amid volatile raw material prices. "Many paper mills are hesitant to book long-term orders because raw material prices are changing rapidly. Some mills have even closed bookings temporarily and are accepting orders only at revised prices," Agrawal said.Apart from raw materials and fuel, several chemicals and process inputs used in paper manufacturing have also become costlier, partly linked to rising global energy and petrochemical prices.Industry representatives said sectors that depend heavily on packaging, including FMCG, e-commerce, pharmaceuticals and food processing, are already seeing higher carton and packaging material costs.