GST, imports dampen paper manufacturing

A marketing executive said the shift to GST, coinciding with the start of the second quarter, impacted “liquidity, and there was stress on payments”. Ahead of the second quarter, the supply chain had dried up as traders wanted to avoid the complication of holding on to stocks during the transition period. “Demand went for a toss” early in the quarter, but now the supply chain has settled down.The demand for coated paper is expected to grow in the next couple of weeks as converters get into the job of making calendars and diaries. More than half the domestic demand for coated paper, estimated at about 8 lakh tonnes, is met through imports. In April-June, supply from China was down due to demand elsewhere, and this had made importers send out additional orders in subsequent months. Along with GST kicking in, there has been a stock pile up in ports, the executive said.

In October-November, arrivals are bound to drop and the stock situation will ease with the demand picking up from converters.The copier paper segment is “seeing a major onslaught”, especially due to dumping from Indonesia. In July alone, about 18,000 tonnes, nearly 25 per cent of the domestic demand, has come in, causing serious concern, he said.

North-South divide
According to a leading trader in Chennai, South has been particularly hard hit due to imports because of the port infrastructure. Mills to the North are relatively insulated. Small traders in the unorganised sector are finding the going tough as GST discourages cash dealings.


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