The Kraft Paper Price Trend in India changed noticeably during Q2 2026, with prices moving higher across most regions. After relatively modest gains in Q1 2026, the second quarter brought stronger price increases as mills faced higher raw material, energy, freight, and production costs. A major factor behind the increase was the weakening of the Indian Rupee against the US Dollar, which made imported raw materials and recovered paper more expensive for Indian producers.
The quarter was challenging for the kraft paper industry because several cost pressures appeared at the same time. Imported Old Corrugated Cardboard (OCC), mixed paper, chemicals, fuel, electricity, and freight all became more expensive. At the same time, domestic supplies remained relatively tight while demand from packaging-related industries continued. This combination created a market where producers had greater scope to increase prices.
Kraft Paper Price Trends in Q2 2026
The overall Kraft Paper Prices movement during Q2 2026 was clearly upward. Prices increased by around 2% across many regions during the quarter, which was significantly stronger than the gains seen in Q1.
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One of the biggest reasons was currency movement. The Indian Rupee weakened by approximately 6–8% during the quarter against the US Dollar. For mills purchasing imported recovered fiber and other papermaking inputs, this had a direct impact on procurement costs.
When imported materials are priced in US Dollars, a weaker Rupee means Indian buyers need to spend more Rupees to purchase the same quantity. This can quickly increase the cost of production, especially when mills are already operating with tight margins.
The higher costs were gradually reflected in selling prices. Mills faced a practical choice between absorbing the additional expenses and passing some of them on to buyers. With supply conditions remaining constrained and packaging demand staying resilient, price increases became more common during the quarter.
Why Did Kraft Paper Prices Increase?
There was no single reason behind the increase in Kraft Paper Prices. Instead, several factors worked together during Q2 2026.
Rupee Depreciation
Currency movement was one of the most important factors during Q2 2026. The Rupee's depreciation against the US Dollar increased the local cost of imported materials.
For mills purchasing imported OCC and other papermaking inputs, the currency movement added considerable pressure to procurement budgets. Even if the international dollar price of a material remained unchanged, its cost in Indian Rupees could still increase because of exchange-rate movement.
Higher OCC Costs
Old Corrugated Cardboard, commonly known as OCC, is an important source of recovered fiber for kraft paper production. Indian mills use imported OCC to supplement domestic recovered paper supplies.
During Q2, the combination of higher offshore OCC costs and a weaker Rupee created additional pressure on mills. Since recovered fiber represents an important part of production costs, changes in its price can have a direct effect on the final price of kraft paper.
Rising Energy and Fuel Costs
Paper manufacturing requires considerable energy. Electricity and fuel are necessary throughout the production process, from preparing raw materials to operating paper machines and finishing the final product.
When energy and fuel expenses rise, manufacturers generally face higher production costs. During Q2 2026, these costs added to the broader pressure affecting the kraft paper market.
Freight and Logistics Costs
Transportation also played an important role in the Q2 price movement. Higher freight expenses increased the cost of bringing imported materials to Indian mills and moving finished paper through the domestic supply chain.
Global shipping disruptions and geopolitical tensions also contributed to higher ocean freight and logistics expenses during the period. These additional costs eventually added pressure to the domestic pricing structure.
Ludhiana Kraft Paper Price Movement
The Natural Brown Ex-Ludhiana 100 GSM 25 BF (MG Finished) kraft paper grade showed an even stronger increase during Q2 2026.
According to the supplied Q2 market information, this grade recorded a 3.53% increase compared with Q1 2026. The rise was supported by higher production costs as well as steady demand from domestic packaging industries.
The market also recorded a 4.56% month-on-month increase during the quarter, showing that the upward movement became stronger as the quarter progressed.
April saw prices strengthen following cost-related mill price revisions. During May and June, prices continued to move higher as imported raw material costs, freight expenses, and currency pressure remained elevated.
This pattern shows how quickly changes in input costs can move through the paper supply chain. Mills first experienced higher procurement and operating expenses, and these costs were subsequently reflected in prices offered to converters and packaging manufacturers.
Kraft Paper Demand Remained Stable
Despite higher prices, demand remained relatively resilient during Q2 2026.
Kraft paper is widely used in packaging applications, so its demand is closely connected with everyday commercial activity. Food packaging, paper bags, labels, e-commerce packaging, and industrial wrapping continued to support regular purchasing.
The continued need for packaging meant that converters still required kraft paper even when prices were increasing. As a result, buyers continued procurement rather than completely stepping away from the market.
This stable demand was important because it allowed mills to pass a larger portion of their increased costs through the supply chain.
Supply and Demand Conditions
The Q2 market was influenced by a combination of limited spot availability and steady demand.
Indian mills were dealing with constrained domestic recovered paper supplies while also facing higher import costs. This created a difficult procurement environment.
At the same time, manufacturers maintained disciplined production rates. Controlling production helped mills balance available supply with demand while protecting margins in a period of rising operating expenses.
The result was a relatively tight market. When buyers compete for limited spot volumes, sellers generally have more room to revise prices upward, particularly when their own production costs are already increasing.
Kraft Paper Price Chart: Understanding the Q2 Movement
A Kraft Paper Price Chart for Q2 2026 would show a clear upward direction, particularly when compared with the more modest movement seen during Q1.
The market started Q2 with prices already experiencing some upward pressure. In April, mill price revisions pushed prices higher as production costs increased. During May, the impact of imported raw material costs, freight expenses, and currency weakness became more visible. By June, these pressures continued to support firmer domestic prices.
For the Natural Brown Ex-Ludhiana 100 GSM 25 BF (MG Finished) grade, the supplied data indicates a 3.53% quarter-on-quarter increase in Q2 compared with Q1. The market also recorded a 4.56% month-on-month increase during the quarter.
This progression highlights how the price movement became stronger as the quarter continued.
Kraft Paper Price Index: What the Movement Shows
The Kraft Paper Price Index can be viewed as a useful way to understand the direction of market prices over time. While an index normally tracks price movement against a selected base period, the Q2 2026 market information clearly indicates an upward trend.
The important point is not only the percentage increase but also the reasons behind it.
A rising price index during a period of higher OCC costs, weaker currency, increased freight, and stronger production expenses suggests that manufacturers were dealing with genuine cost pressure rather than a price movement caused by only one temporary factor.
For buyers, following a Kraft Paper Price Index can help provide context when comparing current prices with previous periods. It can also make it easier to understand whether a change in the market is part of a broader trend.
Kraft Paper Prices and Packaging Demand
Packaging remained one of the important demand drivers during Q2 2026.
The growth of e-commerce, food packaging, retail packaging, paper bags, industrial packaging, and other applications continues to support demand for kraft paper. Even when paper becomes more expensive, businesses still need packaging materials to transport and protect products.
This makes kraft paper different from many products where buyers can simply delay purchases when prices rise. Packaging requirements are often connected to ongoing production and sales activity.
Therefore, stable packaging demand helped support the higher Kraft Paper Prices seen during the quarter.
Q2 2026 Kraft Paper Price Forecast
Looking at the Q2 2026 market conditions, the short-term Kraft Paper Price Forecast remains closely connected to several major factors.
The first factor is the exchange rate. If the Rupee remains weak against the US Dollar, imported OCC and other raw materials can continue to place pressure on Indian mills.
The second factor is recovered paper availability. If domestic supplies remain limited and mills continue to depend on imports, international OCC prices and freight costs will remain important to the domestic market.
The third factor is packaging demand. Continued demand from e-commerce, food packaging, industrial wrapping, paper bags, and related sectors could provide support to kraft paper prices.
However, the future direction can change if input costs ease, domestic recovered paper availability improves, freight expenses decline, or demand becomes weaker.
For this reason, the Q2 2026 price trend should be viewed as a reflection of the market conditions during that period rather than a guarantee of future prices.
What Buyers Should Watch
Businesses purchasing kraft paper can monitor a few important indicators when assessing future price movements.
Currency movement is an important factor because changes in the Rupee against the US Dollar can influence the cost of imported raw materials.
OCC and recovered paper availability are also important. Changes in the availability and international pricing of recovered fiber can directly affect production costs.
Energy costs should also be monitored because electricity and fuel are necessary for paper manufacturing and can influence mill operating expenses.
Freight is another important factor. Changes in ocean and domestic transportation costs can affect both imported materials and finished products.
Packaging demand also matters. Strong demand from e-commerce, food, retail, and industrial sectors can support paper consumption and help maintain firm market conditions.
Finally, domestic supply should be watched closely. Tight availability can create additional price pressure, especially when buyers need immediate spot volumes.
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Overall Kraft Paper Price Trend in Q2 2026
The Q2 2026 Kraft Paper Price Trend was shaped by a combination of currency weakness, higher imported fiber costs, rising energy and freight expenses, and resilient packaging demand.
The Indian Rupee's depreciation of approximately 6–8% against the US Dollar was particularly important because it increased the Rupee cost of imported OCC and other inputs. At the same time, higher freight, mixed paper, electricity, fuel, and domestic transportation costs added further pressure to mill economics.
For the Natural Brown Ex-Ludhiana 100 GSM 25 BF (MG Finished) grade, the market recorded a 3.53% increase compared with Q1 2026. The quarter also saw a 4.56% month-on-month increase, reflecting stronger pricing momentum as the quarter progressed.
The market therefore entered the second half of 2026 with prices supported by higher production costs and stable packaging demand. Future movements will depend on currency conditions, recovered paper costs, freight rates, domestic supply, and overall packaging consumption.
The Kraft Paper Price Trend during Q2 2026 showed a clear upward movement in the Indian market. The increase was driven by several factors rather than one isolated event. A weaker Rupee raised the cost of imported OCC and other raw materials, while higher electricity, fuel, freight, and logistics expenses increased overall production costs.
At the same time, demand from food packaging, e-commerce, paper bags, labels, and industrial wrapping remained stable. Limited supply and continued buying activity allowed mills to pass higher costs on to converters and packaging manufacturers.
The Natural Brown Ex-Ludhiana 100 GSM 25 BF (MG Finished) grade recorded a 3.53% increase compared with Q1, while the quarter's reported month-on-month increase reached 4.56%.
Going forward, the Kraft Paper Price Forecast will depend heavily on currency movement, imported OCC costs, freight rates, energy expenses, and packaging demand. Tracking Kraft Paper Prices, the Kraft Paper Price Chart, and the Kraft Paper Price Index can help market participants better understand changes in the market and the factors behind them.
Overall, Q2 2026 was a period of stronger price growth and higher cost pressure for India's kraft paper sector, with the market balancing rising production expenses against continued demand from the country's packaging industry.
About Price-Watch™
Price Watch™ is an India-based, independent raw material price reporting agency that provides real-time price forecasts and data-driven insights into global raw material markets. Price Watch™ specializes in tracking raw material prices, analyzing market trends, and delivering timely updates on plant shutdowns, supply disruptions, capacity expansions, and demand-supply dynamics. The Price Watch™ platform empowers manufacturers, traders, and procurement professionals to make faster, smarter decisions. Leveraging AI-powered forecasting and over a decade of historical data, Price Watch™ transforms market volatility into actionable opportunity.
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