The Indian paper industry is facing a sharp rise in prices

The Indian paper industry is facing a sharp rise in prices amid rising costs of wood pulp

    The Indian paper industry is preparing for a sharp rise in prices for hardwood pulp, which has reached $615 per ton. Major paper producers introduced new price increases in early 2026 due to rising raw material costs, stable global pulp prices, and strong seasonal demand. The industry is facing significant cost pressures caused by rising costs of pulp, chemicals, fuel, electricity, and logistics, compounded by currency devaluation and supply disruptions.   Despite these challenges, high demand from the publishing, paper, and institutional segments continues to support market dynamics.

Rising pulp prices and cost pressures

    Hardwood pulp prices are firmly anchored above $615 per metric ton (PMT), representing an increase of more than $125 per PMT from recent lows.

The main cost pressures are:

•     - An increase in the cost of pulp (raw materials).
•     - The rise in the cost of chemicals, fuel and electricity.
•     - Increased logistical costs.
•     - Currency devaluation (increases the cost of imported raw materials).
•     - Supply disruptions caused by scheduled maintenance shutdowns at several pulp and paper mills worldwide in the first quarter of 2026.
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Manufacturers' reaction: rising paper prices

    BILT GRAPHIC PAPER PRODUCTS LIMITED (BGPPL):

•     On February 2, 2026, the company notified its partners and dealers of a price increase of +$10 per ton for most paper grades, which took effect on February 11, 2026.
• The cumulative price increase from the baseline was US$60 per tonne, with further adjustments expected by the end of February and in March 2026.

    APP Group (Asia Pulp and Paper):

•     In a circular dated January 27, the company announced a price increase for:
  • - 50 US dollars per ton for uncoated paper.
  • - 30 US dollars per ton for coated paper.
•     The increase took effect immediately.
•     The reason is a sharp increase in the cost of raw materials and transportation costs.

Financial results of ITC Limited

    The Cardboard and Specialty Paper division of ITC Limited has reported the following results for the 3rd quarter of fiscal year 2026:

ITC Limited - PSPD reported growth in its packaging and printing products business driven by both the flexible packaging and cardboard box segments. The company's portfolio of environmentally friendly cardboard and packaging solutions has expanded significantly over the past four years.

Supply conditions continue to tighten

    Scheduled maintenance shutdowns at several pulp and paper mills around the world in the first quarter of 2026 led to tighter supply conditions. This creates additional risks for buyers and maintains a high level of pulp prices.

Key indicators of the Indian paper market:

Importance for the global market

    The situation in India reflects several important global trends:

1. - The increase in pulp prices is global. India is not the only market where prices for hardwood pulp have exceeded $600/ton. This is due to supply constraints (shutdowns of factories) and rising costs for raw materials and logistics.
2. - Manufacturers are forced to raise prices. Rising costs of pulp, chemicals, energy, and logistics are squeezing paper producers' margins. The increase in prices for finished products is a necessary measure to maintain profitability.
3. - Demand remains steady. Despite rising prices, the demand for paper from the publishing and institutional sectors in India remains high. This allows manufacturers to pass on rising costs to customers.
4. - Currency devaluation increases the pressure. For Indian producers who depend on imported raw materials, the devaluation of the rupee increases the cost of pulp in local currency, increasing price pressures.
5. - Eco-friendly solutions as a competitive advantage. ITC Limited relies on environmentally friendly packaging, which is in line with global trends and can become a growth driver in the long term.

Forecast

    In the short term, prices for hardwood pulp will remain high (above $600/ton) due to limited supply and continued demand. Paper producers will continue to raise prices to offset rising costs. In the medium term, the situation will depend on:

•     - restoring supplies after scheduled shutdowns;
•     - dynamics of paper demand in India and other regions;
•     - exchange rate fluctuations and logistics costs.

The key conclusion

The Indian paper industry is facing intense cost pressures in 2026. Rising prices for hardwood pulp to $615/ton, currency devaluation and higher logistics costs are forcing manufacturers to raise prices for finished products. At the same time, steady demand makes it possible to maintain marginality, but further cost increases may lead to a reduction in production and market consolidation.

Tags: #India #paper_industry #cellulose_gard_city #prices #support growth #demand #BGPPL #APP #ITC