EghtesadOnline: There seems to be no end in sight to the huge and sudden rise in paper prices, as well as many other goods for that matter.
Publishers have seen an astonishing 340% increase in the price of coated paper used in printing and packaging industry last year. Last week and in a matter of 24 hours, paper prices jumped 22%.
Let’s take the example of a ream (500 sheet or 70 grams) of Indonesian 100.70 print paper: It cost 1.08 million rials ($7.42) in the month ending March 20, 2018, about 1.21 million rials ($8.31) in the month to April 20, 2018, 3.06 million rials ($21.1) in the month leading to Jan. 20, 2019, and 4.5 million rials ($31.1) in the month to April 20, 2019, the Persian daily Etemad reported.
Many publishers and print media companies have been pushed out of the market ever since the recurrent episodes of paper price surges started, according to Financial Tribune.
Subsidies, Currency Rates and Corruption
What makes the paper price hikes even more difficult to digest is that paper was—and still is—among the 25 so-called categories of "essential goods" for the import of which the government allocates subsidized foreign currency at the rate of 42,000 rials per dollar.
It’s nearly a year now that the Iranian rial has remained above the threshold level of 130,000 to the dollar in the open market. This meaningful difference between the two rates has resulted in widespread corruption in the paper market, just like other markets whose preferred but not incorruptible players have received subsidized dollars.
According to Mohammad Reza Modoudi, the caretaker of Trade Promotion Organization, there is no telling whether subsidized foreign currencies granted to a given importer is spent on importing essential goods.
"Pricing goods, a hallmark of command economy, is known to beget corruption and rent-seeking behavior," Modoudi told the Persian daily Iran.
Investigative reporting by local journalists, including those with the Persian daily Shargh, has revealed that if only €22 million in subsidized currency received by two front companies had been rightfully spent on the import of newsprint, the ongoing paper crisis facing newspaper and magazine owners would not have emerged in the first place.
Print paper Shortage
Referring to different types of paper in Iran’s market, including tissue, packaging and print paper, Deputy Industries Minister Farshad Moqimi said the country produced about 50,000 tons and imported 78,000 tons of tissue paper in the year ending March 2014.
“Iran produces 153,000 tons, imports 6,000 tons and exports 10,000 tons of tissue paper. Iran’s packaging paper production and imports stood at 55,000 tons and 189,000 tons in the year to March 2014 respectively,” he said.
“Last year, we made 725,000 tons and imported 22,000 tons of packaging paper and exported around 188,000 tons. It’s not misguided to say that we are now exporting the same level we used to import five years ago. The main problem of the industry is printing and writing paper, which is up to 95% dependent on imports.”
Moqimi noted that the country needs about 320,000 tons of print paper annually, so the ministry registered orders for importing 442,000 tons last year.
“Imports and production stood at 270,000 and 22,000 tons, respectively, which shows that the country had an import shortfall of 28,000 tons needed last year,” he said.
Leader Orders 2 Ministries to Find Solution
The gripes from publishers about inflated prices of printing and writing paper have become so loud that even Leader of Islamic Revolution Ayatollah Seyyed Ali Khamenei called on Culture Minister Abbas Salehi and Industries Minister Reza Rahmani to work out a solution during his visit to the 32nd Tehran International Book Fair last week.
The event, themed “Reading Is Empowerment” this year, officially opened on April 24 and ended May 4, featuring 3,200 domestic and foreign publishers who showcased their latest editions.
Some 2,400 domestic publishers attended the exhibition with 437,000 books and 800 foreign publishers from 30 countries displayed 137,000 titles.
According to Abolfazl Roghani Golpayegani, the head of Paper and Cardboard Producers’ Syndicate, the Ministry of Industries, Mining and Trade is in charge of order registration—the first step in importing any type of commodity—whereas the Culture Ministry decides upon the market mechanism for paper distribution.
“The absence of cooperation between the two ministries and timely allocation of foreign currency for imports are to blame for the dramatic rise in the prices of paper,” he told Mehr News Agency.