Why is the price of paper rising?

With the resumption of consumption after the lockdowns, the demand for paper increased sharply and suddenly, causing difficulties in the supply of raw materials and transportation.

In April, paper pulp, the raw material for paper and cardboard, cost more than 40% more expensive than in the same period of 2019, before the pandemic, according to INSEE.

On top of that, “wood has become scarce, so pallets to transport products have become rare,” says Thibault Laumonier, CEO of the French subsidiary of British paper and packaging group DS Smith Packaging.

He also mentions a delay in the commissioning of new machines because of the shortage of semiconductors.

In an industry that consumes a lot of energy to dry the paper pulp and run the machines that form the sheets, the rise in the cost of gas or electricity since the start of the war in Ukraine also has a significant impact.

Added to this are specific problems depending on the type of paper: for newsprint, the rise in prices is partly linked to a drop in production, with producers abandoning this sector in the face of the drop in newspaper sales.

On the other hand, for corrugated paper used to make boxes, prices are driven up by the growing demand for packaging boxes for e-commerce or for the food industry, which is trying to abandon single-use plastic .

What are the consequences of this increase?

The situation is sometimes tense for manufacturers, but they have been able to transfer price increases to their customers in the face of rising costs.

“Overall, companies manage to keep their margins”, assures Paul-Antoine Lacour, general delegate of the French Confederation of the paper, cardboard and cellulose industry (Copacel).

But this inflation has an impact downstream on all user sectors, i.e. a large part of the economy, from the press to hygiene papers, including food packaging and cardboard of all kinds.

This rise in prices makes Mr. Lacour fear “a decline in consumption” if the purchasing power of the French falls too much.

Will the price of school supplies increase at the start of the school year?

Like all paper producers, notebook manufacturers are facing rising costs. The particularity of this sector is that it negotiates its selling prices with mass distribution in the autumn for the following school year: those for the next school year were therefore set at a time when the price of paper had already increased, but still far from current records.

According to Mr. Lacour, distributors have committed to increases of 12 to 15% in the purchase price of paper school supplies for September 2022, which could also raise the price on the shelves for the consumer.

“Since then, we have had significant increases in many production costs. If the negotiations were to take place today, we would be on much higher amounts,” he said.

And the toilet paper?

Michel-Édouard Leclerc, chairman of the strategic committee of E. Leclerc supermarkets, warned in April that the price of toilet paper would “increase considerably”, during an interview on BFMTV.

According to manufacturers, producing toilet paper is indeed about 20% more expensive than before the pandemic.

“But in practice, price increases will probably be lower,” said Paul-Antoine Lacour.

Unlike newsprint or cardboard, which are sold to companies to be transformed again, toilet paper is sold directly to distributors, therefore to the final consumer, which makes price increases more difficult to pass on, he explains. -he.

It is also a basic necessity, so price negotiations could be tense.