The corrugated packaging industry is currently grappling with significant challenges due to a substantial rise in kraft paper prices. Over the past three months, the cost of kraft paper has surged by more than 20%, severely impacting the profit margins of corrugated box manufacturers. This price escalation is primarily attributed to limited supplies and elevated prices set by mills. Swadesh Sharma, President of the MP Corrugated Boxes Manufacturers Association, highlighted that while production costs have soared, manufacturers are unable to proportionately adjust the prices of end products, leading to a squeeze on profit margins.
The situation is further exacerbated by a scarcity of waste paper, the primary raw material for kraft paper production. Rajendra Mittal, former Vice-President of the Federation of Paper Traders’ Association of India, noted that the shortage of waste paper, especially pronounced during the monsoon season, has contributed to the sustained high prices of kraft paper.
In response to these challenges, corrugated box manufacturers are seeking price increases of up to 12% to offset the rising costs of raw materials. The frequent shutdowns of kraft paper mills and subsequent price hikes have placed manufacturers in a difficult position, necessitating adjustments in pricing strategies to maintain operational viability.
This confluence of factors—rising raw material costs, supply chain disruptions, and limited availability of essential inputs—has created a complex environment for the corrugated packaging industry, compelling stakeholders to navigate these challenges strategically to sustain their operations.
