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Domestic paper price increases, market in tumult
Despite the low demand, domestic paper producers still have decided to raise the sale prices. The enterprises that use printing papers, writing papers and newsprint cannot understand what is happening in the market.
Few buyers, but prices still increasing
In mid January 2011, the Vinh Tien Notebook Company received the notices from some paper suppliers about price increases. “Surprisingly, domestic paper products are more expensive than the import products,” said Nguyen Minh Trung, Marketing Director of Vinh Tien Company.
Also according to Trung, now is not the high season for paper sale, because the notebook and book production will only begin in the second quarter. Therefore, the price increases at this moment are really a big surprise.
Tan Mai Paper Company, for example, has raised its sale prices from several hundreds of thousand dong to 2 million dong per tonne. Printing paper and writing paper are selling at 23.1 million dong per tonne, an increase of 2.2 million dong per tonne, while newsprint at 14.49 million dong per tonne, an increase of 800,000 dong per tonne in comparison with late 2010.
Phan Minh Nghia, Deputy General Director of Tan Mai Paper Company, said that the company had no other choice than to raise its sale prices, because the dollar has increased, while the interest rates are overly high. “We have to import input materials and we will have to pay for the imports in accordance with the new exchange rate. Meanwhile, the input material prices have also increased in the world market,” he explained.
However, according to Tuoi tre, while the prices of domestic products have increased, the prices of import products sourced from Indonesia and Malaysia remain low, at 21.5-22 million dong per tonne. NC, a big paper importer in HCM City, said that the imports were still cheap because suppliers were still selling what they imported in the third and fourth quarters of 2010.
Vietnam relying on input material imports
According to the HCM City Paper Association, in 2010, Vietnam consumed 2.3-2.4 million tonnes of paper, including 1.2 million tonnes of imports. Meanwhile, domestic producers can only arrange 50 percent of the total input materials needed to make 1.2 million tonnes of paper products.
This explains why Vietnam has been relying on input material imports, and the domestic prices are always adjusted in accordance with the world price. Tuoi tre has quoted an expert as saying that though a lot of plans on developing material growing areas and making pulp have been drawn up, they have not been implemented
An officer from the paper association said that Vietnamese enterpriseswere using backward technologies, and therefore, the quality of domestic paper products is not consisten. This means that domestic products cannot compete with import products. He has been warned that domestic paper producers will have a difficult period ahead as Vietnam has to open its market to imports. The tariff on ASEAN sourced products has dropped to zero percent on printing and writing paper, and to three percent on newsprint.
vietnamnet
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