What can we expect in the future as the paper crisis continues?
Paper prices are rising due to the ongoing paper crisis. Although it may be disappointing to hear, the end of the crisis is still not in sight because prices are constantly changing and lead times for obtaining paper can be several months. According to our statistics, the cost of paper has risen by 70% in recent years.
The shortage of paper has occurred for a variety of reasons. It has been influenced by the rise in energy costs, a historical fall in paper prices, increased demand and reduced supply in Europe, as well as the pandemic, which has disrupted maritime transport flows from Asia, resulting in higher logistics costs, the closure of several paper mills in Europe and worker strikes in Finland. The strikes, which began in early 2022 and lasted until the end of April, caused a standstill at United Paper Mills (UPM), which is part of one of the largest paper industry groups in Europe.
However, the ending of the strikes at the Finnish paper mills does not appear to have solved the entire problem. This sector is currently being impacted by the war in Ukraine. At the moment, we no longer have paper on the market that was previously being delivered to our region from Russian cities such as Syktyvkar and Svetlogorsk. Paper mills no longer receive cheaper wood, which was typically delivered to Europe from Ukraine, Belarus or Russia; as a result, expensive European wood is currently used, which is reflected in product prices.
The lack of paper, as well the lengthy process in obtaining it, has an impact on the work of printing houses and customer orders. At the moment, suppliers are selling out of paper very quickly and it is difficult to predict how long it will take to obtain new supplies. We cannot change the situation, which is affecting all businesses in this sector; however, we encourage our customers to seek alternative solutions by introducing them to different types of paper and grammage, as well as encouraging them to plan their printing works ahead of time.
While it is still difficult to predict how the paper shortage situation will end, prices should not fall in the near future. In a sense, we can say we are currently experiencing the real cost of paper, which has not increased for a long time under natural inflation. Paper products have been undervalued in recent times because they were frequently associated with “littering” or irresponsible consumption. The current prices should change this approach because as paper prices rise, it will be used to print content of higher value.
Our suppliers note that a decrease in paper prices is only possible if, following a cessation of supply of many products to the East, including paper and cardboard, a surplus of paper products occurs, allowing paper prices to be adjusted. However, if paper prices do not fall in the near future, users will look for alternatives. UPM predicts that the demand for paper will fall by about 5% next year.
We cannot change the situation, but we must adapt in one way or another. Crises always generate fears and uncertainties about the future, but they also create new opportunities for planning and seeking alternatives or other solutions.