An anti-dumping duty on newsprint imports from certain countries is unlikely to be of much help to indigenous producers, as the cost of landed paper from these countries has fallen sharply and at present, is almost near the reference price fixed by Indian producers two years ago.Sources in the paper industry told The Financial Express that in spite of newsprint manufacturers pressing for imposition of this duty, the industry will not benefit much from it.
The reference prices for imports vary according to countries. For Canada it ranges between Rs 25,786 per tonne and Rs 26,696 per tonne, while for United States and Russia it is Rs 26,696 per tonne and Rs 22,958 per tonne respectively.
"These reference prices were calculated and fixed on the basis of prevailing prices of newsprint from the respective countries from April 1996 to October 1996, when the prices of newsprint originating from these countries were higher than it is available now," sources said.
The Canadian newsprint prices droppedsharply from $700 per tonne to $450 per tonne and prices of Russian newsprint dropped from $575 per tonne to $465 per tonne in the last one-and-a-half years. In the first week of April, this year, prices of imported newsprint remained more or less unchanged, except for certain fluctuations. Prices of Canadian newsprint moved within $535 to $550 per tonne and that of Russian hovered around $610 per tonne.
Taking into account the foreign exchange fluctuations, which at the moment is more or less stable, and the cost of freight, Russian newsprint is available to Indian consumers at Rs 24,000 to Rs 25,800 per tonne and Canadian newsprint at Rs 26,700 to Rs 27,200 a tonne.
Moreover, major Indian producers have also increased their ex-factory prices in January 1998 to take quick advantage of the falling value of the Indian rupee against the American dollar, witnessed during December, last year. Mysore Paper, Tamil Nadu Newsprint Ltd and Hindustan Newsprint Ltd have increased their prices at an average of Rs1,200 to Rs 1,500 per tonne. Prices of indigenous newsprint, apart from the cost of freight, is around Rs 22,100 per tonne.
Newsprint industry observers said that there was hardly any cushion for the Indian manufacturers to relax. "Indian newsprint is available in the market at Rs 22,000 a tonne, plus freight and Russian newsprint at Rs 24,000. The anti-dumping duty, which at most will be only 10 per cent, will not be enough to safeguard the interests of the domestic industry," observers said.
Although the union commerce ministry has recommended the imposition of anti-dumping duty on newsprint from the United States, Canada and Russia, this has still to be cleared by the union finance ministry.
Moreover, Indian publishers are opting for lower inventory levels due to easy availability of newsprint. A number of them are also thinking of long-term agreements with foreign producers as it will fetch them a lower price.
However, there is only a one piece of good news for Indian newsprint manufacturers.Prices of American newsprint are likely to rise due to labour unrest at some of their units.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
