Analysis On Impact of Covid-19 On Global Paper and Paperboard Packaging Market
Manufacturers mostly utilize paperboard packaging boxes to preserve the nutritional content and freshness of their products. This market's worldwide trade will be driven by sophisticated and improved transportation infrastructure that allows items to be moved from one location to another without damage. External factors, such as air and temperature, do not affect the real operation of paper and paperboard, which is referred to as product packaging.
However, the spread of COVID-19 is an unprecedented worldwide public health crisis that has impacted nearly every business, and its long-term consequences are expected to have an influence on industry growth throughout the projection period. COVID-19 has resulted in changes in consumer behaviour and demand, purchasing patterns, supply chain rerouting, current market dynamics, and substantial government engagement. Economic insecurity caused by the pandemic had also triggered the investors in both the public and private sectors to reconsider the investment decisions in terms of taking up new construction-based projects.
The government had taken many steps to ensure the availability of raw materials by keeping track of the supply and demand of the intermediate goods for producing paper board packaging materials. Alongside, the government of various countries is also taking action such as providing subsidies for raw materials, supporting the domestic producers with short-term loans to assist SMEs (small and medium enterprises) and local manufacturers engaged in the production of paper and paperboard boxes and cartons.
The manufacturing sector of paper and paperboard materials was one of the most damaged sectors by COVID-19. Several steps were taken to increase international cooperation among the countries to promote investments and also to improve the ease of doing business inside the nations. Also, various relief measures were provided for the middle market and large businesses in the packaging industry. New and existing projects were given a kick start by inviting technological innovations supported by the government.
Impact on Price
The worldwide paper and paperboard market is extremely fragmented, with several small and big competitors competing on price and quality, due to the spread of the COVID-19 pandemic, the demand for packaging materials had seen a severe downfall since May 2020, resulting in the fluctuation of the prices of raw materials used for making smart boxes and containers. The rise in prices of basic materials caused by the pandemic, as well as a scarcity of stock with wholesalers, had posed a problem for many small and large-scale projects, affecting the global paper and paperboard market.
Impact On Demand
The major sector of the packaging market is the food industry and e-commerce business as a major part of the demand for packaging boxes comes from these units. The restaurant and hotel sector was one of the sectors that suffered the burden of COVID-19. The demand for restaurant foods was likewise sluggish, as people were mainly prioritizing the health requirements over any other requirements. Furthermore, the emergence of remote-based work facilities had reduced the need for office buildings along with its canteen foods and hence affecting the global paper and paperboard market.
Impact on Supply Chain
The COVID-19 pandemic had put the contemporary global supply chain to the test like never before. The pandemic had a genuinely global impact, causing many fractures in numerous supply chains like component suppliers, production locations, and in the last mile to the end-users. The production process came to a pause due to the shortage of labourers in almost all the manufacturing sites. Due to a ban on interstate travel, the supply chain also suffered as a result of the emigration of migrant workers. The shutdown of distribution and trade routes has affected the supply channel, resulting in the rise of the operating costs of raw materials. During that situation, all the manufacturers of paper board packaging materials were facing issues with the timely availability of raw materials.
Paper and paperboard boxes are widely utilized in the food and e-commerce sector due to their numerous applications, varying from the packing of food and different goods in the container for transportation. The COVID-19 pandemic has caused substantial obstacles to global supply chains, due to a dip in restaurant activities, the demand for packaging materials has faced a sharp decline in several regions. The manufacturers suffered huge losses due to repeated nationwide curfews and shutdowns continue to hamper or even halt the movement of raw materials and completed goods. Manufacturing and distribution issues were likely the most visible disturbances to all types of packaging markets. However, the government of various countries has opted for various policies to strengthen international partnerships, diversification of suppliers, an innovation for reducing the need for certain resources, and circular economy techniques to boost economic activities of the entire world.