High Commodity Prices – The New Threat to Books?

book-printing-pressShould we prepare for significantly higher book prices?  The signals from the commodities markets seem to be saying an emphatic “yes!”  Commodity prices are rising to new heights driven by a number of factors, including:  increased competition from rapidly industrializing economies like India and China; soaring energy costs; and, paradoxically from dislocations caused by the boom in biofuels.

Books require a host of input commodities for their production including:  paper, inks , chemicals used for coatings.  Here are a couple of examples. 

  • As reported in PrintWeek, paper suppliers told printers earlier this year to expect price hikes of 8% or more.  In addition to increased manufacturing expenses, sky high energy costs are raising distributino costs. 
  • Another commodity used in the production of paper is sulfuric acid.  This chemical is also used in the production of fertilizers.  The boom in corn planting, driven by the biofuels boom, is causing major shortages.  The price of the compound has shot a whopping 266% over the past 5 months according to a recent article in BusinessWeek

Commodity pricesTo date, producer price increases have been running ahead of price increases at the consumer level.  But as our current unpleasant experience with retail food and energy prices demonstrates, this won’t last long.  Unless there is a major cooling of economic growth, on a global scale, this commodities price surge may be longer lasting than previous cycles.  If real incomes continue to stagnate or decline, books may become a one of those discretionary expenditures that is the first to go when belts are tightened.

peak everythingMany pundits have opined about the imminent demise of the printed book at the hands of technology – whether the Internet or e-books or books read on iPhones.  But, if, as author Richard Heinberg has suggested, we are witnessing “peak everything,” the real threat to the printed book might be ever increasing commodities prices, driven by scenarios outlined over three decades ago in Limits to Growth.

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