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Rise in Kraft Paper Prices and Its Impact on Packaging

The final product price doesn’t entirely depend on the manufacturing process; it also relies on the packaging. A high cost of packaging will raise the price of the product, which consumers won’t find convenient.

The ideal packaging material in existence is kraft paper, a durable, printable, and multifunctional option. Unfortunately, there has been a spike in the cost of kraft paper in recent times, which has left most packaging companies wondering what it’s all about.

If you have this concern, we will answer your question shortly. This post covers what kraft paper is and the reason behind the increase in its price.

Enjoy!

What is Kraft Paper?

Kraft paper is made from wood pulp using the Kraft pulping process, where it gets its name. This biodegradable material is ideal for industrial and commercial packaging applications thanks to its appealing qualities. It can be used to make boxes, paper bags, envelopes, and much more.

Why is Kraft Paper Better than Plastic in Packaging?

1. Cost

The cost of packaging is crucial to the final cost of an item which means that the packaging affects how the product performs in the market. Unfortunately, plastic is more expensive than kraft paper, so using plastic isn’t the most cost-effective method of packaging products.

So, using kraft paper is a nice way of cutting packaging costs without compromising the safety of the products. At the same time, kraft paper is much lighter than plastic packages, which translates to a lower shipping cost. As a result, using kraft paper is the most economical way to go if your only alternative is plastic.

2. Durability

Kraft paper is resilient enough to withstand standard printing processes using technologically advanced machines. As a result, it provides a lot of flexibility, allowing you to customize the final appearance of the package to match the requirements of the manufacturer. Even shipping kraft paper packages is easy since it has a long shelf life and can be used in different ways.

3. Eco-Friendliness

Unfortunately, plastic isn’t biodegradable, which is why it’s not an eco-friendly packaging solution. On the other hand, kraft paper is degradable, meaning that it won’t cause any adverse effects on the environment even when disposed of.

So, if you are looking for a way to minimize the negative impact of packaging on your surroundings, kraft paper is a suitable choice.

Reasons for the Rise in Kraft Paper Prices

There are several factors that have promoted the increase in Kraft Paper Prices. Let’s look at them below.

1. Increase in Demand

Retailers and product manufacturers have shifted their focus to delivering product straight to consumer door front. In doing so, they are using an increased quantity and quality kraft paper to ensure the product arrives safely and looks presentable. Paper substrates help these brands meet their sustainability goals and commitments since it is some of the most recycled and recycleable packaging we have.

2. The Chinese Paper Monopoly

China is one of the largest manufacturers of packaging paper in the world. In recent events, APP-China, the leading kraft paper company, merged with another manufacturer, which allowed them to control 51% of the market. This means that China is now a monopoly for Kraft paper, enabling them to control prices.

At the moment, the paper companies in other places around the world have suffered a decrease in manufacturing capacity due to the coronavirus pandemic. As a result, various enterprises have had to rely on China to meet their paper demands, enabling APP-China to raise prices, forcing other manufacturers to follow.

3. Waste Paper Import Bans in China

China imposed a ban on importing plastic and mixed papers in 2018. In January 2021, they extended the ban to include recycled fibers required to manufacture pulp, an essential component in packaging materials. So, instead of importing plastics or fibers, Chinese manufacturers are ordering paper pulp while redirecting resources to recycling waste paper.

As different companies in China look for alternative paper sources, the price of materials like kraft paper, cardboard, SBS, molded pulp, and paperboard keep rising. This is because the manufacturing process is more costly than it previously was.

Since China is still the largest kraft paper manufacturer, the rest of the market can only adapt to the new prices.

4. Issues in Global Logistics

Another factor that has contributed to the rise of kraft paper prices is global logistics problems. As kraft paper and other packaging materials become more expensive, some transport companies, specifically those offering shipping through air or sea, are taking advantage and hiking their prices.

The global shipping network is still recovering from the challenges associated with the COVID pandemic. Regardless, the operating companies are making it harder for smaller distribution companies to get their packaging materials, affecting business negatively.

At the same time, issues like shipping delays keep affecting the supply chain, which doesn’t help the situation. Fortunately, airlines can deliver the necessities when required, but companies should be prepared for the higher transport costs that will be imposed.

How the Rise in Kraft Paper Prices is Affecting Distribution Companies

Most packaging and distribution companies depend on Chinese suppliers to meet their packaging materials needs. So, the spike in production and transport costs will translate into the final cost of the bags and boxes these companies require to package various items. This means that they will come at a higher price causing the packaging services to increase as well.

So, the packaging companies aren’t the only ones paying the price for the rise in kraft paper costs. Even the final consumer will need to pay more to meet the high cost of packaging services.

Since the Chinese paper companies are expensive, some packaging companies could opt to source their materials from local manufacturers. Unfortunately, as businesses turn to domestic sources, they will quickly deplete the available packaging paper. To prevent such a situation, these local companies will also increase their prices which means that you’ll still pay extra.

Kraft Paper Alternatives

If kraft paper is too expensive, there are some alternative materials that you can use for a more affordable packaging process. These materials include

  • Non-woven polypropylene bags
  • Heat-sealed reusable bags
  • Hemp, canvas, or cotton specialty bags

Conclusion

Kraft paper remains to be one of the best packaging materials in existence. Unfortunately, circumstances have led to an increase in the cost of this material which translates to a higher packaging cost.

While this might seem expensive, it’s still affordable compared to using plastic for your packaging needs. Kraft paper is a resilient, versatile, and eco-friendly packaging option that is the top choice for most packaging and distribution companies. To keep up on the latest and greatest news in the paper and packaging industries, stay on top of our NORKOL Resources page!

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