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Critical scrap paper shortages in South Africa

South Africa’s paper recycling sector is facing a major shortage of recovered paper, especially cardboard.

The Paper Manufacturers Association of South Africa warns that this trend will continue, putting further pressure on domestic paper mills ahead of the annual year-end shutdowns.

‘K3 and K4 paper grades are used in the production of paper packaging for the export market and transit of domestic goods,’ explains the association’s executive director Jane Molony. ‘But with the citrus season now complete and fewer cardboard boxes in circulation, there is less available to recover,’

On average, 1.2 million tonnes of waste paper are recovered in South Africa annually, with more than 90% of this being locally recycled into new paper, packaging, and tissue. The disruption of supply chains because of Covid-19 has also had a direct effect on the consumption, demand and recovery of paper products.

‘With offices and schools remaining closed or on rotation during 2020 and early 2021, there was less paper to collect,’ says Molony, adding that demand for paper packaging has increased due to the move to online shopping and to a more environmentally responsible form of packaging.

Along with disruption to major international shipping routes, the continued reduction in stock levels is driven by a significant appreciation in export prices for waste paper. As a result, paper traders are favouring the export market.

According to Molony, a mill using recovered paper requires 21 days of waste stock per grade for optimal operations. Prior to the Covid-19 pandemic, mills could hold adequate stock levels for at least 30 days.

More recently, domestic mills have had to consume more of their stock levels, resulting in an average 63% deterioration of stock levels from 36 days to 13 days.

Exporters of locally recovered waste paper supply large foreign buyers. ‘Some of these buyers exceed the size of the combined South African paper industry and can afford to pay significantly higher prices for waste paper than our local manufacturers,’ Maloney laments.

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