Paper prices jump, expensive materials blamed

Paper prices have been increasing rapidly due to increases in material prices. Just over the last two months, the prices of different kinds of paper have increased by 2.5 million dong per ton.

Prices jump by 15 percent just within 2 months

Nguyen Minh Trung, Director of Vinh Tien Company, a notebook producer, has informed sales agents that every notebook will increase 300-500 dong as of early May 2010.

Trung explained that the price increase is inevitable since printing paper prices have increased by 15 percent from 16.8 million dong to 19 million dong. “We have to raise prices because the cost of materials has increased sharply,” Trung complained.

According to H.L from a notebook production workshop in HCM City, other kinds of paper like Bristol and couche (used for covers of books, notebooks or advertisement publications), have also seen their prices rise. Most are estimated to have increased by one million dong per ton over the last month, selling at 23.5 million dong per ton now. Additionally, used paper has jumped from 2.8-3 million dong to 3.7-4 million dong per ton.

Meanwhile, sharp pulp price increases over the last two months have added to paper producers’ headaches. According to Han Vinh Quang, Director of An Binh Paper Company in Binh Duong province, the import pulp price is not very high at $850-900 per ton, an increase of $200 per ton since the beginning of 2010. Therefore, An Binh must raise prices. Carton paper, for example, is now selling at 7.4 million dong per ton, up from 5.4 million dong, while duplex paper is at 12.4 million dong instead of 10.8 million dong.

Currently, domestically-made paper is cheaper by 600,000-800,000 dong per ton than imports. However, due to the overly high price of materials, most domestic factories have cut productivity to run at moderate levels, thus creating shortages.

Vietnam still relies on imports

According to Quang, the paper price increase is no surprise. Everything is more expensive now, from pulp prices to electricity and water rates. Meanwhile, all the 2009 incentives to help companies recover from the economic crisis have been removed.

Quang added that Vietnam still relies on imports, so when the world’s price escalates, the domestic price also increases accordingly.

According to the HCM City branch of the Vietnam Paper Association, in 2009, Vietnam consumed 2.3 million tons of paper and had to import 1.3 million tons.

To make one million tons of paper, domestic companies must import nearly 50 percent of the materials. “It is clear that domestic producers cannot control the market supply,” an official of VPA concluded.

It also explains why many enterprises must still purchase imported paper at 22 million dong per ton, one million dong more expensive than domestic paper.

Tuoi tre

Tags: Vietnam paper, Vietnam paper prices