Finnish newsprint shortage not yet affecting Estonian papers
An ongoing strike at a major Finnish forestry company and sanctions imposed on Russia could lead to a situation where Finnish newspapers may cut back on print edition volumes. Estonian newspaper volumes may not initially be affected by the disappearance of Russian newsprint from the market, however an increase in demand on newsprint will ultimately drive the price of Estonian newspapers up as well.
The printing of newspapers had already taken a hit during supply difficulties experienced during the pandemic, and difficulties were further exacerbated by increasing energy prices, which affected industries across the board.
Unlike Estonia, the printing of Finnish papers is highly dependent on Russian pulpwood, a dependence further amplified by a labor strike that has been going on at major Finnish forestry company UPM since January. As the availability of newsprint has become problematic, papers in Finland are preparing for cuts in volume.
According to Printall board member and sales manager Tõnis Peebo, the strike in Finland is going to affect the entire European paper market.
"Prices have been continuously on the rise since last year, and the availability of paper has decreased," Peebo explained.
Kroonpress CEO Andres Kull said, however, that for printing houses, everything will depend on previous agreements.
"Our own business is not built on Russian paper; we have agreements in place with Scandinavian producers," Kull explained. "Prices are another matter entirely, of course. These are affected by the availability of raw materials, energy, transport and everything else."
He believes that one danger may be increasing protectionism on the market as well, as fears increase that producers may begin to give preference to domestic clients.
"Of course, if such a phenomenon were to rear its head, then we will certainly end up in a worse situation, as newsprint is not produced in Estonia," the printing house CEO admitted. Nonetheless, he noted that the common practice is that existing clients for whom some kind of quotas have already been allocated will remain.
"Each such event impacts the supply and demand ratio and has painful reactions on the market," he said.
The biggest cause for concern is the increase in energy prices, which impacts all internal prices. Prices are changing rapidly, and while contracts were previously concluded with vendors for a period of one year, contract lengths are currently being restricted to just one quarter.
"It's just that no one is looking ahead that far anymore," Kull explained. "Situations are changing so quickly, and all proportions in the economy are relatively displaced. Some players have disappeared from the market, some are experiencing difficulties. These issues are so complex that it is very difficult to forecast."
According to Kull, they have experienced difficult periods before, but contracts were previously concluded for periods of half a year at a time. "Right now, some prices are being raised once every two weeks in some cases," he said.
Newsprint shortage not a concern through fall
The Estonian market shouldn't have to worry about a shortage of newsprint for the next half a year, Peebo said. "As far as we know, the paper needs of newspaper clients in Estonia should be covered at least through this fall," he explained.
According to Argo Virkebau, CEO at Ekspress Meedia, the company will do what it can to avoid increasing the price of its newspapers, but there is a chance they may have to.
"We have held on tightly to our prices," he explained. "Both delivery and especially paper are seeing rapid price increases, but thus far, the decision has been to suffer them."
Virkebau noted that under current contracts, the printing of newspapers owned by Ekspress Meedia is secured through the end of August.
It won't be possible to avoid increasing newspaper prices forever, though, especially if prices more than double. "If the printing house sends a new price list, then naturally we can't escape it either," he said.
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Editor: Aili Vahtla