Introduction: In a flash, news of an even bigger wave of paper price surges spread across food industry professionals' social circles, leaving countless companies hanging by a thread in the flood of raw paper price increases. The continuous spike in paper prices has put immense pressure on food industry players, and a Dunkirk-style retreat may be on the horizon! Due to rising raw material prices and reduced supply, the price of packaging paper such as corrugated paper has more than doubled year-on-year, raising the price of a carton by 0.2 to 0.5 yuan. Since September, paper prices have continued to climb, and food companies with significant packaging costs are feeling the pressure, all facing the need to raise prices. Entering September, paper prices continued to surge. From September 1 to 3, 109 paper mills nationwide raised waste paper purchase prices by 30 to 260 yuan per ton. In the past August, 114 paper mills cumulatively raised paper prices by 600 to 800 yuan per ton. The uncontrolled surge in paper prices has also drawn attention from CCTV Finance for the seventh time within a year. However, after hearing experts' comments, food industry professionals can no longer sit still! ■ Xu Hongcai, Deputy Chief Economist of the China Center for International Economic Exchanges: I think we should look at this from two angles. On the supply side, rising raw material costs, including labor costs, environmental protection, and other factors, have led to insufficient supply. On the other hand, demand pull is also an important factor, as the global economy is generally recovering, China's economy is warming up, and consumer demand remains stable. Especially in recent years, the development of e-commerce has led to a rapid increase in demand for express packaging cartons. It can be said that structural adjustment and consumption upgrading are also driving up paper prices. ■ Zhao Ping, Director of the International Trade Research Department at the CCPIT Research Institute: E-commerce uses a huge amount of packaging materials every year. In 2015, the total packaging volume in China was 10 billion, and in 2016 it exceeded 14 billion. Therefore, the rapid increase in demand for packaging cartons will inevitably raise raw paper prices. However, I believe that in this round of price increases, the supply side may be the main reason. This year, due to low raw paper inventory and rising demand, supply has followed market demand, but the increase has not yet reached the scale of demand, ultimately driving up paper prices. Additionally, rising raw material prices are also a very important reason. China's raw paper materials come partly from abroad and partly domestically. The United States and Japan are our main import sources, and the production scale of raw materials in these countries has been continuously declining, reducing the quantity imported to China. Domestically, because paper mills have increased construction projects and started operations, demand for raw materials has grown. At the same time, price increases in auxiliary materials such as coal and steel are also added to paper prices. In summary, a combination of factors has kept raw paper inventory at historically relatively low levels, and in the future, paper prices still have room to rise. ■ Zong Liang, Chief Researcher at Bank of China: In fact, supply-side reform means suppressing low-end products and not allowing zombie enterprises to exist. Only in this way can the entire industry achieve transformation and upgrading. I believe the change in paper prices mainly comes from cost push, with rising comprehensive costs such as raw materials leading to price increases. This is essentially the recovery of the entire Chinese economy, accompanied by consumption upgrading and rapid demand growth. In the past, people had limited purchasing power and didn't buy much; now they buy more and more. This means that in the future, we must change our consumption concepts, and for packaging, we need to reduce requirements, adopting light and green consumption. Packaging companies are at a standstill without paper Waste paper prices rise significantly Since the fourth quarter of last year, prices of various packaging papers have risen by more than 30%, with corrugated paper and containerboard seeing particularly notable increases, putting enormous pressure on packaging companies. Moreover, in some places, upstream paper mills have even halted production. Packaging companies are complaining bitterly, and paper mills also have their grievances. For a time, midstream and downstream companies seem to point fingers at the most upstream waste paper recycling companies. So, are waste paper recycling companies doing well now? With increasing environmental protection efforts, most waste paper recycling companies have been shut down. Due to resource shortages, waste paper prices in some areas have risen from over 1,800 yuan per ton last year to over 2,300 yuan per ton now. However, because of the large fluctuations during the price increase, recycling companies rarely dare to hoard stock, basically selling as soon as it comes in. As the Mid-Autumn Festival approaches, China's food industry will increase paper usage, and other industries will also enter the peak season for paper demand, so paper prices may continue to rise. What exactly is causing the paper price increase? Food industry professionals and practitioners see it this way: @正品制檀: The rise in raw paper prices is natural with the increase in raw materials and costs. However, paper mills raising prices twice in three days, each time by 200 or 300 yuan per ton, and multiple times within a month, is absolutely unreasonable! Conclusion: Large enterprises manipulate prices in an orderly manner, while small enterprises blindly follow, causing panic downstream, industry chaos, and loss of confidence. Papermaking is not adjusting prices reasonably but crazily grabbing money. Large enterprises like Nine Dragons, Lee & Man, Rongsheng, Huatai, Zhonglong, and Jingxing all achieved profits of 1 billion to over 2 billion yuan in the first half of the year, which is shocking. @老马: The crazy price increases are partly due to raw materials and environmental protection. But the magnitude shouldn't be this large; the main reason is that the industry is highly concentrated, and monopolistic price increases are the root cause. All industry insiders can see this clearly, but experts can't. Why is that? @MYD: Experts are just Monday morning quarterbacks. The strange surge in paper prices has many factors: 1. Industry monopoly. 2. Restrictions on commercial housing purchases in first- and second-tier cities and inflated housing prices have led to a large amount of hot money speculating on real economy materials. 3. Upstream raw material factories, taking advantage of environmental protection policies, are asking for exorbitant prices. 4. Monopolistic commercial enterprises should be brought to justice to ensure the healthy development of the real economy! @简单快乐: Environmental protection one-size-fits-all, closing small paper mills, and monopoly by large paper mills are the root causes. @无敌熊猫: Have these experts gone to the grassroots to understand? Do they know how difficult it is for us to have to watch the faces of paper mills? Last September, when paper prices first surged, no one said anything. By the end of last year, prices had risen excessively, and starting in May this year, they surged again. It's clearly corporate monopoly. The paper mills directly said, 'Take it or leave it.' Our customers keep asking why prices keep rising. We're also struggling. The three major environmental protection measures killed many printing and small paper factories last year. In our area alone, over 2,000 were shut down, let alone other places. What do you think about this? Click the image for details The 3rd (CFIC) China FMCG + Internet Conference will be held in Chongqing in October 2017. The conference will closely focus on the theme "New Forces, New Ecology," inviting 1,000+ distributors, 500+ brand owners, founders of 200+ B2B platforms, and 100+ investment and financing institutions to jointly explore new chapters of cross-border integration! Core topics of this conference:
How the FMCG industry can leverage B2B to achieve new growth opportunities
How to build a new supply chain behind new retail
How intra-city logistics can help B2B achieve leapfrog development
Highlights of this conference:
The industry's first "2017 China FMCG B2B Industry Competitiveness White Paper"
Case sharing of excellent transforming and upgrading distributors
Conference + exhibition upgrade, with Hall 6 Internet Technology Exhibition strengthening connections
Leaders from well-known enterprises in various fields, including Alibaba Retail Link, ProLogis Finance, Eternal Asia Supply Chain, Best Store Plus, Yijiupi, Unilever, Hisense Technology, and Yunmei Shares, will deliver speeches and share pioneering views.
October 17-18, 2017 Chongqing International Expo Center Registration is now open. Long press the QR code below or click "Read Original" to register. Early bird tickets before September 15 enjoy a 30% discount! Add friend and note "Conference Registration" Click the links below to review the highlights of the 1st and 2nd FMCG + Internet Conferences: 2016 "FMCG + Internet" Summit Forum 2017 (2nd) China FMCG + Internet Conference Click the links below to review the highlights of the 1st and 2nd FMCG + Internet Conferences: 2016 "FMCG + Internet" Summit Forum -END-