War and natural disasters won’t slow the rise in printing costs. Conflicts in the Middle East, especially the Libyan civil war, drove oil prices from $90 a barrel in early February to more than $112 in April, and that puts pressure on prices of raw materials, including many of the precursor ingredients for inks. Meanwhile, the massive earthquake and tsunami that struck Japan in March has disrupted paper production there.
Despite these developments, some industry observers maintain that these events will not exacerbate pressure on paper and ink prices beyond what was already mounting over the last year. Direct marketers are more concerned about the prospect of additional postal increases, overshadowing worries over printing materials. Some observers believe the market is unlikely to support additional hikes.
“It’s not as big a concern as postage rates. Paper is a commodity, and commodity prices go up and down over time,” notes Allen Abbott, chief operating officer of direct retailer Paul Fredrick. The Japanese earthquake, while it idled several large paper producers, is not expected to affect paper prices in the US, according to industry insiders. They note Japan is not a major paper exporter like China. However, Japan is a major pulp supplier to China.