War in Ukraine could trigger a rise in toilet paper prices

Essential items such as toilet paper and disposable tissues could see prices increases as pulp inventories fall around the world, which risks a shortage of supply, according to Suzano, the largest global producer of the raw material.

According to the general manager of Suzano, Walter Schalka, Russia is an important source of timber for Europe, and this trade has come to a complete halt since the invasion of Ukraine.

In addition, Russian wood has lost global certifications, which means that pulp producers in Europe, especially in Scandinavia, will have their production capacity reduced.

“The pulp inventories had gradually diminished in such a way that the pulp shortage could reach a point of interruption”, says Schalka in an interview.

In the first quarter, the availability of cellulose was also affected by problems in the maritime transport, the interruption of the internal logistics with the strikes of workers in different parts of the world and the delays in the entrance of new factories.

Combined with strong demand, these factors have led to a rise of around 40% in pulp prices in the Asian market this year, according to BTG Pactual, a Brazilian investment bank specializing in investment capital and venture capital.

Amid the lack of some raw materials, the Russian pulp producers struggled to continue operating. As the invasion of Ukraine continues, more interruptions are expected in the supply in the Black Sea.

In Latin America, for example, the demand for cellulose continues to increase, however, producers in the region have no space to receive new orders as their production is saturated and working at full capacity. For Suzano, demand has been higher than what the company could meet, says Schalka.

In the case of tissue paper demand, which is an essential item, the impacts of inflation are expected to be moderate. Even so, the executive says the full effects of the war in Ukraine have yet to be seen.