“We’ve never seen monthly price increases like this in the history of the business,” said Brian McClay, a pulp industry analyst. “It’s unheard of.”
Prices for market pulp have jumped from $606 per metric ton in September to more than $907 per metric ton in April, McClay said. It means an increase of 50-ish%.
There are a bunch of factors that increase the prices of this product. A post-Covid recovery in China, the biggest buyer of pulp in the world, and global shipping delays are some of them that has driven toilet papers’ prices to something never saw in the business.
Another reason is that the consumer manufacturers purchase pulp on the open market and then use it to make toilet paper and other tissue products. Around 70% of the pulp that US consumer manufacturers buy for toilet paper comes from Brazil, McClay said, followed by around 30% from Canada.
The rising prices are already impacting brands. CNN cited data from Nielsen IQ, which found that toilet paper prices jumped 15.6% during the year ending on May 1 versus the year prior.
Earlier this year, Kimberly-Clark Corporation, the company that owns Cottonelle and Scott brands, among a slew of other consumer products, announced it would be raising its prices in North America beginning in late June. The company said the price hikes are “necessary to help offset significant commodity cost inflation.”
Kimberly-Clark also noted in its most recent quarterly report that it was experiencing higher costs due to the price of pulp.
Pulp is just the latest example of a raw-material shortage hitting the US economy as it recovers from shutdowns that disrupted supply chains and altered consumer behavior.
Toilet paper is just one of dozens of items that are getting more expensive or facing short supply as an after-effect of the pandemic. Other items such as computer chips are experiencing a worldwide shortage, which is hampering the car industry most of all. The gas prices are soaring and expected to keep increasing over the summer. Plastics prices are rising, leading to a jump in packaging costs. And everything from chlorine to used cars to chicken wings are experiencing tight supply.