Christmas crackers could be cheaper this year thanks to a big drop in Chinese pulp prices.
Crackers on sale in the UK are “mostly mass-produced in China”, according to Mintec, where the price for softwood pulp - one of the most common materials used in the frame of the cracker - has been on a downward trend since 2014.
“Chinese pulp prices have fallen 11% year on year and 3% month on month, reaching a three-year low in November,” says Mintec data analyst Verity Michie. The drop is partly due to rising global supplies of softwood pulp, which started to increase last year and have been above “the balanced level of supply for the majority of this year,” Michie adds.
There has also been a drop in Chinese demand for softwood pulp, which has resulted in reduced buying activity. “The economic downturn in China put downward pressure on the already falling demand in the middle of the year,” says Michie. “As a result, producers have lowered pulp prices further in recent months in an attempt to attract buyers.”
Of course, the cost of the toys or prizes inside - which are mostly made of plastic - will also have an influence on overall cracker price. And, again, there is good news.
Chinese plastic prices have been falling as a result of lower demand and feedstock costs since the summer season. “On average, Chinese plastic prices have fallen by 15% since June 2015,” says Michie. “Imports to China have also decreased due to the availability of cheaper domestic stock.”
With plastic buyers holding back on purchasing in anticipation of lower prices towards the end of this year, sellers have been forced to offer “deep discounts” in order to meet sales targets for the year, which has put even more downward pressure on Chinese plastic prices, Michie adds.