Newsprint price will be raised up to 12%

JAKARTA (JP): The Indonesian Pulp and Paper Association (APKI) said yesterday it would raise the price of newsprint by 10 percent to 12 percent, following the rise in fuel and electricity prices.

The association's executive director, Kahar Haryopuspito, said yesterday the new price would take effect immediately.

"Fuel and electricity makes up 20 percent of newsprint's production costs," Kahar said.

Most newsprint factories use fuel to dry their paper, so "if fuel and electricity prices rise by an average of 60 percent we must increase our price by 10 to 12 percent", he added.

The government raised fuel and electricity prices sharply beginning Tuesday to reduce subsidies and reduce the state budget deficit.

Kahar said that by raising the price, the association risked losing more of its local market.

Most local publications have reduced pages, while smaller ones have been forced to close down as they could no longer afford to buy newsprint, which is priced in U.S. dollars.

Kahar said the domestic market for newsprint had dropped by 50 percent, prompting companies to export their products.

However, a lack of cargo containers resulting from a decline in importing activities has hampered export activities, he said.

The secretary-general of the Association of Indonesian Newspaper Publishers, Leo Batubara, said yesterday the association had no reason to raise the price of newsprint.

"Even if they have to raise the price, it should be after June 30 when the previously agreed price was due to be reviewed," Batubara said.

Newsprint producers committed earlier to selling newsprint at US$500 a metric ton from April through June.

Leo said his association would discuss with APKI the price increase to find out which production components had increased, and how much the increase was.

The price of newsprint this week is Rp 4,280 per kilogram, based on an exchange rate of Rp 8,475 to the dollar.

Last week newsprint was sold at Rp 4,240 per kilogram at an exchange rate of Rp 8,400 to the dollar.

The exchange rate is calculated on the average rate of the prior week.

The current price is about 200 percent higher than last June's price, before the currency crisis hit Indonesia and weakened the rupiah by over 70 percent.

"As long as the dollar is still about Rp 8,000, publishers will still be in distress.

"Some newspapers such as Kompas and Media Indonesia can still increase their pages because of increased advertisements," Batubara said. (das)