Analyze 3 Reasons Why Toilet Paper Cost Increases


Toilet paper is an important product in our daily life, but the toilet paper price increase has attracted people's attention. In this article, we will analyze the reasons why the toilet paper prices increase and their impacts on consumers and the market and the toilet paper cost.

Are toilet paper prices increasing?

Yes, the toilet paper prices are increasing. There are 3 reasons for increase in toilet paper prices.

Reason1: Raw Material Costs

As we all know, the main raw material for toilet paper production is pulp board, and the price of pulp board directly affects the price of toilet paper.

The production of pulp board requires a lot of water, electricity and natural gas, and the energy price directly affects the price of pulp board.

According to the previous report, the Russian Natural Gas Industry Corporation (Gazprom) announced on the 25th that, due to technical reasons, the gas supply of the "Beixi - 1" natural gas pipeline will be reduced to half of the current gas supply from the 27th, that is, 20% of the maximum gas supply. As the largest economy in the EU and the country with the highest dependence on Russian natural gas, Germany is in a particularly difficult situation. According to the German news agency, Germany must save more natural gas than other countries this winter to avoid the huge problems caused by Russia's suspension of natural gas supply to the German economy. The director of the Federal Network Administration of Germany, Miller, and others called for about 20% savings. Only in this way can the worst situation be avoided.

On May 6, Schalka, CEO of Suzano, the world's largest wood pulp manufacturer, said to the public that the company's wood pulp inventory has been gradually decreasing, the market demand for Suzano has already exceeded the company's capacity, and the supply may be interrupted in the future.

The price adjustment of Asian market in May is still pending. According to public reports, Suzano has recently raised the price of eucalyptus pulp and fluff pulp exported to North America and Europe by about 4%. Before Suzano, Klabin, Arauco and Bracell, the three pulp enterprises, have taken the lead in announcing that since May, the price of staple fiber pulp exported to China has risen by 30 dollars/ton, or 3.8%.

Russia is an important source of wood in the world. Russian timber has also lost global certification since the conflict with Ukraine. This means that European pulp producers, especially 2 billion tons of goods are transported by sea every year. This resulted in containers being left at the wrong location, congested ports, and longer loading and unloading times. In turn, the reduction of transportation capacity leads to the increase of transportation costs.

With the rapid rise of energy prices in Europe, toilet paper manufacturers began to pass on the sharp rise in prices to wholesalers and consumers. From the perspective of wood pulp price, the price of imported wood pulp rebounded from the bottom in the fourth quarter of 2021 and has remained at a high level so far.

Reason2: Production Costs

Production costs includes transportation, labor costs, etc.

The industry website TissueOnline pointed out that the global paper industry is still facing difficulties in shipping and unstable supply chains in some regions, which led to a large number of inventory consumption and the outbreak of new orders, aggravating the imbalance between supply and demand. It further said that the smooth implementation of Suzano's price increase in April this year also indicated that the price of wood pulp was still on the upward path, and there was no turning point in the short term.

Reason3: Market Demand and Supply

Influence of seasonal demand and market competition affect the cost of toilet paper.

Since last year, the toilet paper industry has fallen into the dilemma of high cost and weak demand. Paper enterprises generally hope that the price of wood pulp will fall back to the historical normal range.

But during covid in 2020, in Amazon, Costco and local stores, toilet paper products have been out of stock. When goods are available, customers may not be able to buy the brand they want. Part of the reason for the shortage of toilet paper is that people have been hoarding it. Procter and Gamble reported that the sales of "Bounty Paper Towels" in July showed a large-scale growth, and customers swept them away from the store shelves.

This shortage may also be related to the way the company produces paper products. Lean Manufacturing is the culprit for this shortage. Last month, the Wall Street Journal published an article entitled Why Paper Towels Are Still Not Enough. It said that paper towel manufacturers operate and build to minimize costs, which is also the main reason for the shortage.

Lean production is not unique to the tissue industry. In the past few decades, it has prevailed in automobile manufacturing, fast fashion clothing manufacturing and many other industries. But when a product is sold out quickly, there will be a shortage. The tissue manufacturers were unprepared because their business was not based on the sales model under epidemic.

When demand fluctuates dramatically, as happened during the covid, no matter what warehouse management system is used, enterprises often do not have enough commodity inventory and manufacturing capacity to meet demand. When consumers are lucky enough to find toilet paper, their prices are usually higher than normal.

Impacts on consumers and the market

Impacts on consumers

The toilet paper price increase has tangible effects on consumers' daily lives and household budgets, particularly for low-income families. Moreover, some people may even resort to reducing consumption to mitigate the impact on their budgets. Or people prefer to choose lower-cost alternatives like bidets.

Impacts on market

The fluctuations in toilet paper prices reverberate throughout the market, affecting stakeholders ranging from manufacturers to retailers. Toilet paper price increase directly impacts the profit margins. Price changes may influence consumers' perceptions of brands. And brands that maintain stable prices during fluctuations may earn consumer trust and loyalty.

Toilet paper cost per roll

How much is toilet paper supposed to cost? The average cost of toilet paper varies widely depending on several factors including brand, quality, size, and location. Generally, a 24-pack of single roll toilet paper ranges from $24 to $26 in the United States. It is more cost-effective to purchase bulk toilet paper or as a subscription service to save money in the long run.

How much does the average person pay for toilet paper?

In 2024, the average American may go through 150 rolls of toilet paper annually. Toilet paper cost per year may be $150.

How much did toilet paper used to cost? In 2020, toilet paper prices during covid is high. The average price per unit of toilet tissue was 7.91 U.S. dollars. There were temporary shortages of toilet paper in some areas, which led to price fluctuations.

In conclusion

The cost and price of toilet paper are mainly influenced by factors such as raw material prices, production costs, packaging and transportation costs, as well as market supply and demand relationships and brand competition. Consumers can consider multiple factors such as brand, specifications, material, and price when purchasing toilet paper, and choose the product that suits them.

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