Paper is a great paradox. It is the kind of product we both love and loathe. We want to live in a paperless world, yet we covet our packages, paper goods, printers, and publications. In the e-everything world in which technology is replacing certain products, paper remains a staple of life. From wallpaper to toilet paper, from religious texts to Omnibus Bills, it seems we can’t live with paper, and we can’t live without it.
The price and demand for lumber have significantly increased since the pandemic started, and supply has not kept up. Working from home means more boxes arriving at scattered addresses. COVID-19 has driven many people to construct backyard structures, build new homes and send more gifts in boxes.
Although it is convenient to blame everything on COVID, the truth is that paper mill production in America has been declining long before the pandemic. Like many aspects of industrialization, we are losing American-made manufacturing and products, and that means paying more to get goods here. Think supply chain issues, slow boat from China.
Global politics also impact wood and paper since the leading timber-producing countries are China, the U.S., and Japan.
Paper is also about politics. Remember all the arguments over ballots and how people cast them. Mail-in vs in-person, and we are still arguing about how we count votes in local, state, and national elections. Mail-in requires more paper. Some critics think their will be a shortage of ballots due to the paper supply.
Over the past couple of years, the print industry has had to deal with paper prices going up along with increasing labor costs and higher postage costs. Along with paper prices increases, you have ink prices and chemical prices soring.
There are other factors that contribute to the rise in paper costs:
- Freight shortages and price increases
- Mill closures
- Energy and fuel costs
- A shift in production priorities due to increased demands for tissue at home.
As the economy reopened and corporate profit began to recover, demand for all paper grades increased while supply chain disruptions pressured supply. As a result, the price of paper rose significantly, increasing, on average, 9.7% in 2021 alone. While the economy is recovering from the pandemic, we will see 2023 suppliers working to meet demand. Overall, the price of paper is expected to continue increasing over the next five years.
One of the hardest hit industries, by the highest price increase, is the packaging industry, with an overall 40% increase in materials and high demand. It is expected the cardboard production industry will go from 184 million tons in 2021 to 191 million tons in 2022 and beyond, fueled by strong demand from online shoppers. Packaging prices also effect the price of groceries. More individual wrapped items, more information required on packages, all affect costs.
The global market for wood pulp is primarily driven by the rising demand from the paper industry. Wood pulp increased by over 25% between 2020 and 2021, which is huge. The rising consumption of tissue paper throughout the world, as it is primarily used in kitchens, toilets, and households is a large market factor. The market is expected to witness continued growth in the forecast period of 2023-2028.
For now, expect paper prices to keep rising along with other goods and services. Paper is a simple concept that has grown increasingly complex over decades in terms of cost, availability, the environment, and the advent of global technology. If we can untangle the problems around paper, we might be able to unpack our way through a thicket of global issues.
Learn more about paper at www.twosidesna.org