Monday, August 06, 2018

Toilet paper, tissue moistened and disposable diapers will be more expensive

The turbulence in international trade should bring increased the price of toilet paper and other products in the category of tissues, which include items such as paper towels, handkerchief moistened and disposable diapers. The move, which comes the trailer of the possible increase in commercial rates, should gain strength and bring even more pressure on profits of companies in the sector, such as the P&G the greatest impetus comes from the increase in the price of pulp, main raw material for the manufacture of these products.
The P&G toilet paper maker Charmin and Kleenex Puff out there, said on Tuesday that recently began to inform the network of retailers in that is present on an average increase of 5% on the selling price of these brands. The company says it is also bringing in 4% the price of Pampers diapers in North America.
Kimberly-Clark has already raised the price of Kleenex and other products line the tissue segment worldwide by up to 2% in the second quarter of this year. In parallel, your reduced profit estimate for the year of 2018.
Demand from China, the biggest and fastest growing market in pulp consumption in the world, is at the center of the fall in global supply. Pulp prices recorded historic low in 2016, weakened by the Chinese economy in deceleration. The economic upturn in 2017 stimulated increased demand for pulp, move the suppliers failed to follow due to the unexpected closure of large litter bins.
In addition, in an effort to reduce your role as world's largest recycler of the residue, China imported only 7.1 million tons of the product in the first half of this year, falling from 52% in comparison with last year. The measure that banned the use of mixed recycled paper imported in the country entered into force on the last day of December 31, opening the Chinese market a sudden demand for large quantities of recycled pulp, used in packaging.
The trade wars are complicating the thread even more. Earlier this year, Canada increased its tariffs for imports from the United States in value equivalent to $ $575 million in tissue products, toilet paper and paper towels.
Industry executives fear that tariffs imposed by China are the next step in this horizon of trade disputes, if the US becomes reality the threat to tax other $ $200 billion in products imported from China.
If China react to the tall, imposing tariffs at levels similar to those of the United States, would reach approximately $ $2.4 billion in pulp and paper exports to the Asian country, said Jake Handelsman, Senior Director of International Trade Association American forests and paper (AF & PA).
— China is A very important market for our industry. So these are not welcome news — highlighted Handelsman.
The pulp produced from wood or recycled paper, is the only raw material used in a number of tissues, besides being part of the production of disposable diapers and absorbent. The pulp of a single eucalyptus tree can be used to produce up to a thousand rolls of toilet paper.
The short-fiber pulp, raw material used to produce hygienic and sanitary papers, advanced about of 60% since the end of 2016 in the international market, according to the Council for pulp and paper Products (PPPC), which monitors the prices based on data from the global consumer market. The price of long-fiber pulp, used in nappies and tampons, rose 21% in the same period.
— They need to raise prices. If you are paying 21% more for long-fiber pulp and 60% more for short fiber, you need to pass this high cost forward or simply will not be possible to maintain the activities — evaluates Arnaud Franco, senior analyst of the PPPC.
Cellulose is not only the main raw material for consumer products like paper towels, many companies use also packaging produced from this raw material. With the rise in the cost of production and shipment of paper products, the consumer will have to pay more for everyday items such as tampons and tissue paper.
Americans are spending more this year to buy many of these products, according to Bernstein's calculations, investment management firm, based on data from Nielsen.
In practice, the price paid by the consumer depends on the decision of retailers, that end up balancing adjustments within a range of products, which do not always reflect the high costs passed on by manufacturers. Is that retailers can increase the price of paper towels, for example, avoiding raising prices of disposable diapers.
Thus, while the P&G stated in July that avoided raising the price of its products despite the rising cost of pulp, the consumer ever pays more for Charmin toilet paper on the market. Bernstein's analysis shows that the average price of the product on the retailers rose to 6.4 percent in the 30 days ending in the middle of this month of July.
See the average volume of toilet paper, towels and tissues consumed per person over 2017
Likewise, the retail price for Bounty paper towel began to rise six months ago, although prices of the Puffs have fallen or remained stable since the beginning of this year. The P&G did not comment.
— The pulp has diffuse effect. When it advances, it's like hitting a golf ball within a garden hose, impacting the entire structure of industry cost — highlights David Garfield, a consumer products consultant of educational session.
Tissue on line - 02/08/2018
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