A Toilet Paper Emergency? Paper Shortages Loom for US

A Toilet Paper Emergency? Paper Shortages Loom for US
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Andrew Moran
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A paper shortage is looming for the U.S. economy, according to a new report.

The global supply chain crisis is creating problems in the pulp and paper sector, one of the world’s largest industries. This could result in diminished supplies of toilet paper, product labeling, bank statements, and even election ballots.

Paper demand is up by more than 100 percent year-over-year, according to the Thomas Index Report for the week of March 21. Household paper products surged by 5.4 percent in February, according to the latest Bureau of Labor Statistics data.

The biggest problem has been the industrial transition to cardboard production instead of paper output. The immense shift led to approximately 2.5 million metric tons of paper capacity in North America going offline since early 2021.

As a result, this could lead to a decline in inventories of a wide range of consumer paper products, affecting a broad array of sectors and companies.

A truck carries acacia wood for pulp in Pelalawan, Riau Province, on Indonesia's Sumatra island, on Sept. 16, 2015. (Adek Berry/AFP/Getty Images)
A truck carries acacia wood for pulp in Pelalawan, Riau Province, on Indonesia's Sumatra island, on Sept. 16, 2015. Adek Berry/AFP/Getty Images

From food product labels to packing and distribution materials, this corner of the global marketplace could experience “fluctuations,” according to the Thomas Index Report.

Experts say importing paper products might not be the solution amid surging international shipping costs, worldwide supply snafus, and extensive delivery delays.

A growing number of Europe-based paper mills have halted operations because of the energy shock emanating from Russia’s invasion of Ukraine.

Not a Square to Spare?

Should the paper crisis intensify, industry observers anticipate another round of toilet paper panic-buying.

In the early days of the COVID-19 pandemic, there was a run on toilet paper at retail chain stores and mom-and-pop shops across the country, creating shortages of the bathroom essential. Companies have responded to the escalating inflationary environment by slimming down on toilet paper rolls.

Procter & Gamble’s Charmin ultra-soft toilet paper 18-count mega package now consists of 244 two-ply sheets. This is down from the previous 264 double-ply sheets per roll.

The United States is the world’s largest consumer of toilet paper. The estimated annual toilet paper consumption per capita in the United States was 141 rolls in 2018.
“A single tree provides up to 1,500 toilet rolls per year,” wrote QS Supplies in a recent study. “In the U.S., that’s enough for 10 people. And that’s just the big trees.”

Overall, the cost of wood pulp—an ingredient to manufacture toilet paper—has risen exceptionally, sending the price of toilet paper higher.

In October 2021, consumer giant Kimberly-Clark stated that shoppers would see higher prices for various household items, including Scott paper towels, Huggies diapers, Kleenex facial tissues, and Cottonelle toilet paper.

CEO Michael Hsu cited inflation pressures and stated that the business is facing a “volatile and difficult macro environment.” The company revealed during a conference call that its costs had advanced by $480 million amid higher pulp, energy, and distribution expenses.

“The global supply chain is under pressure, and we do expect cost to remain elevated for a period,” Hsu told analysts. “Not all costs. But the polymer-based products seem like they’re going to remain elevated for a little while. We mentioned U.S. labor costs and pressures on transportation globally. I think that’s going to remain elevated for a while because I don’t see a fundamental catalyst to change that in the near term. And so that’s why we’re making some of our moves.”

This could further exacerbate the energy crisis, since producing one ton of paper products requires an average of 11.5 gigajoules of energy. For the European Union, the world’s third-largest industrial energy consumer, this could be another headache to endure.

Elections, Electricity, and Exams

It isn’t only toilet paper that could fall victim to these circumstances. Elections in the coming months may also be severely affected amid paper shortages.

Election officials are having difficulty acquiring raw materials to print and mail ballots, primarily paper and envelopes. As a result, experts say voters may not even receive an “I Voted” sticker.

A roll of "I Voted" stickers sits on a table inside a polling station at a Ross Valley Fire Department in San Anselmo, Calif., on June 5, 2018. (Justin Sullivan/Getty Images)
A roll of "I Voted" stickers sits on a table inside a polling station at a Ross Valley Fire Department in San Anselmo, Calif., on June 5, 2018. Justin Sullivan/Getty Images
Mary Clark, clerk of Delta Township in Michigan and president of the Michigan Association of Municipal Clerks, told Politico that she submitted an order for 72,000 envelopes in January. Typically, it takes roughly two weeks to be filled. She has yet to receive them.

Dean Logan, registrar of voters for Los Angeles County, alluded to an early April special election to replace a member of the California state legislature that will “eat into our envelope supply and our paper supply.”

Looming paper shortages aren’t only affecting the United States. Many nations worldwide are adapting to the changing landscape.

In Sri Lanka, for example, the government has canceled exams for millions of school students in the western part of the country because the South Asian nation ran out of printing paper. The term tests were postponed indefinitely, as Sri Lanka is going through its worst financial crisis in 75 years.

Paper shortages have also hampered the issuance of the Ceylon Electricity Board’s hydro bills.

Andrew Moran
Andrew Moran
Author
Andrew Moran has been writing about business, economics, and finance for more than a decade. He is the author of "The War on Cash."
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