DHARMENDRA PANDYA, PRESIDENT, highlighted the Indian corrugated industry is once again in crisis due to severe price hikes in Kraft Paper, with increases ranging from 20% to 30% region-wise. Mills claim surge can primarily be attributed to rise in cost of their main Raw material viz Indian & Imported OCC (Old Corrugated Containers). The prevailing global situation has further complicated matters, exacerbating container freight availability and driving up prices.
Not only paper all other Raw material costs have surged sharply due to several factors:
1. Increase in OCC Prices : The prices of Indian & imported OCC have risen considerably over the past three months, compounded by scarcity and supply issues.
2. Rising Starch Prices : Starch prices have jumped by 25% in recent months.
3. Local Freight Increases : Local freight costs have also seen a rise.
4. Electricity Tariff Hikes : State electricity boards have increased tariffs.
All these increases have huge impact on cost of a Box. Corrugated industry operates on a wafer-thin margin and is in no position to absorb such humongous increases in costs. We urge end users of corrugated boxes to understand the pressures stemming from raw material price increases when determining box prices moving forward.
Corrugated boxes are essential across multiple sectors, including FMCG, pharmaceuticals, automobile parts, milk and dairy products, electronic goods, textiles and ready-made garments, leather and footwear, horticulture, fruits and vegetables, online retail, and export goods packaging, to name a few. This scarcity and resulting price hike threaten initiatives like Make in India and Atmanirbhar Bharat, as they will inevitably lead to higher costs for essential commodities.
Paper mills frequently raise their prices without prior notification. Due to the fragmented nature of the industry, which primarily operates in the micro and small MSME sectors, corrugated box manufacturers are unable to adjust their prices adequately to cope with the rising costs of kraft paper. This has placed a considerable financial burden on these manufacturers, eroding their already slender margins and pushing many into the red. The very survival of the industry is at stake.
