Soaring paper prices cut deep

JULY 2010

AUSTRALIAN businesses could be hit with an increase in bulk paper costs of up to 20 per cent as three global events over the last half continue to impact worldwide pulp production.

General manager of wholesalers Ed Office Products Tony Bertrand, says challenges within the global pulp production industry will continue putting pressure on local prices.

“Although the AUD/USD exchange rate has improved in recent times, the rising cost of pulp, some 33 per cent higher than mid last year, has diluted the benefit of exchange gains,” he says.

“The result of this upward pressure on the world pulp price has translated to increased costs across our paper and paper products.”

The Chilean earthquake of late February remains the biggest burden on the industry, with the South American nation contributing 8 per cent of the global pulp production.

With the recovery in Chile still underway, full production levels aren’t expected to be resumed until September and Asian export markets in particular will suffer.

They were hardly reported on in Australia, but the worst US snow storm seen in decades shut down pulp and paper mills in affected areas; while strikes in major ports in Finland will have after-effects for several months after thousands of shipping containers remained on shore.

Sharpe Office Supplies purchasing manager Gareth Jones, says a 10-20 per cent price increase is expected to be seen from the end of this month.

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