Sunday, November 29, 2020

Exporters face £130m paper pile-up in 2021 as trade restrictions hit

UK exporters of paper used in paper packaging, newspapers, magazines and personal hygiene products face a possible £130 million surplus of potentially recovered fibre next year as a double-trade deadline looms, according to research from Rabobank.

The trade threats – China’s complete ban on recovered paper  imports and a potential hard Brexit, both of which will complete at the end of 2020 – mean UK paper supply chain face an oversupply in recovered paper. This is largely caused by imports of packed goods produced outside of the UK, the bank’s ‘World Fiber Map’ report states.

Britain has neither the sufficient capacity nor infrastructure to efficiently recycle or sustainably reuse its trade-induced glut. The report states that business and governments will need to significantly invest in the country’s recovery and recycling infrastructure to tackle oversupply.

The UK is the second biggest exporter of recovered paper globally after the US. The restriction on its trade comes at a time of increased economic uncertainty owing to COVID-19 and Brexit. It will likely stimulate firms to invest in their recovery and recycling facilities.

Rabobank’s report sets out the strategies needed to provide a long-term solution to the issue. They are increased government support, investing in recovery and recycling facilities, a focus on new product development and better collaboration of players across the whole paper supply chain.

Natasha Valeeva, a senior analyst for F&A supply chains at Rabobank and the report’s lead author, said: “China’s complete ban on recovered paper imports comes at the worst possible time for UK exporters.

“Brexit and pressure from governments, brand owners, consumers and investors to be more circular already made for an uncertain outlook. With China’s ban on RCP imports and COVID-19 thrown into the mix it makes for a perilous road ahead.

“Now’s the time for local action. Government support – which is already far-reaching owing to the pandemic – needs to be extended, as will investment in pre-existing recycling facilities, paper mills and the development of new products.

“While COVID-19 has placed unwelcome strain on every sector of the economy, sustainability is still the pertinent issue of the day. Now’s not the time for papering over the cracks the industry faces.”

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