Paper Consumption Rising Despite Advance of Digital Technology

According to a recent article in the FINANCIAL, Tbilisi, Georgia, and Kiev, Ukraine, paper consumption is rising despite the advance of digital technology, and growth is set to accelerate as demand in Asia and emerging nations increases. If you live in a country that has adopted the "paperless office" and where e-readers proliferate, the fact that paper consumption is growing might come as a surprise, the article notes.

 New technology has led to a drop in consumption of newsprint in the U.S. and Western Europe. But less than half of the wood pulp produced in 2013 was made into printing, writing, and newsprint paper. The rest was made into other products including paperboard packaging, toilet tissue, and paper towels. Demand for these products is rising the most in emerging markets, according to the article.

China has led the increase in demand. Ten years ago, China accounted for about 15% of global paper demand. Today, it accounts for around 25%, making it the largest consumer of paper in the world, ahead of the U.S. and Western Europe at 18% and 17% respectively.

 Despite this, China’s paper use per person is still only a third of that in the U.S. (74 kg vs. 228 kg). As China and other emerging markets continue to grow, with an estimated 650 million people set to join Asia’s urban population in the next 20 years, many think consumption will increase further. Urbanization tends to be associated with increasing demand for hygiene and consumer products containing paper, such as toilet tissue, hand towels, and cleaning wipes.

Worldwide paper use has grown an average of 1.7% each year over the past decade. Consumption is expected to grow at an annual rate of 2.4% over the next five years, driven by emerging market demand.

Recycled paper accounts for around 55% - 60% of global production, the article notes. However, paper can be recycled only a handful of times before the fibers break down and become unusable. Some countries mandate the use of non-recycled paper in certain types of packaging, for example, when it comes into contact with food. .

The U.S. is the world’s largest producer of wood pulp, followed by China and Canada. Global patterns of production are changing, however. Improved cultivation techniques have significantly increased the potential yield per hectare of some tree species. Eucalyptus, originally from Australia, has become popular, and grows well in Latin America – a region that is increasingly important in pulp production.

Brazil, for example, has more than doubled pulp production in the past 20 years, overtaking countries such as Sweden, Finland, and Russia. Eucalyptus can grow year-round in Brazil and reach maturity within six to seven years. Trees growing in North America or Scandinavia, where growth stops during winter, can take 25 years to be fully ready for harvest. Brazil currently produces 40% of the hardwood pulp sold worldwide. This could increase to 60% duuring the next 10 years.

Though China is a significant producer of pulp, domestic demand continues to outstrip domestic supply. Around 30% of Brazil’s pulp exports go to China. With China’s demand for paper likely to continue to rise, Brazil’s pulp exports to China are set to grow in the coming years. Paper is another sector demonstrating the south-south trade flows that are increasingly important to the global economy.