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The global tissue market has experienced exceptional turbulence in the past couple of years, caused by the Covid-19 pandemic raging in all continents in 2020-21. In the first virus wave in early 2020, panic buying and product hoarding resulted in strong sales and a substantial increase of stocks of many household necessities, including toilet paper and other tissue products, while the away-from-home (AfH) business collapsed because of lockdowns, home-office working and limited public and recreational traffic. Statistically, this led to an extraordinary global growth rate in tissue consumption of 5.8% in 2020, which is the record-high rate in its 30-year history.
But what goes up, must also go down. This was very much the case in 2021, when our figures show declines in tissue consumption in many regions, including North America, Western Europe, the Near and Middle East, Japan and Oceania, although Latin America was stable. But very strong growth of almost 11% in China saved global demand from the zero-growth that we had expected; the final outcome for growth in tissue consumption in 2021 was 0.7%.
This slow growth mainly resulted from destocking both at household pantries and through the whole distribution chain, meaning weaker retail sales, and the AfH sector was yet far from a full recovery. But the combined growth of these two years was 3.2% per year, which is very normal growth in global tissue consumption. This can be interpreted to mean that actual tissue consumption was hit only in the AfH sector and the actual usage by households remained rather stable, because the variation in growth was only due to the fact that we cannot measure stock changes and need to use apparent consumption to measure consumption.
We expected that global tissue consumption would return to its long-term trend growth line of 3.3-3.4% per year in 2022. According to our current knowledge and available statistical updates, tissue consumption really returned to normal in many regions, but there was an exception – China, where our preliminary information suggests that consumption growth was very weak, remaining below 2% in 2022. This is a major surprise, given that we had expected growth of some 6.5-7.0%, down from 11% in 2021 and below the long-term growth trend.
With this expected growth rate for China, global tissue consumption would have grown by 3.8%, and 2022 would have been a strong year. But now, assuming that our data for China will remain so weak when the Annual Report of the China National Household Paper Industry Association (CNHPIA) will be published later in the second quarter, global tissue consumption grew by only 2.5% in 2022. This shows how large an effect developments in the world’s largest tissue market have on the global average growth rate. Global tissue consumption grew to 44.4 million tonnes in 2022 from 43.3 million tonnes in 2021, according to our current data.
In North America, our figures are practically final, with only marginal revisions possible in foreign trade statistics. Still, any such revisions would not change our conclusion that the North American market returned to normal conditions and the AfH market fully recovered in all segments, with the exception of offices, in 2022. Working from home partly continues and the number of employees working in offices may never return to a level above the 75% rate seen before the pandemic. In the At-Home sector, higher tissue product prices limited growth, with consumers purchasing smaller package sizes and moving to normal or lower pantry-stocking levels. As a whole and in terms of volume, tissue consumption grew by 1.5% in North America in 2022, after a collapse of 6.5% in 2021. But the volume of consumption was still about 5% below the 2020 record level.
In Western Europe, 2022 was a positive recovery year. Tissue consumption totaled more than 7 million tonnes, climbing above the 2020 level and showing strong growth of almost 3.4% from 2021. The AfH sector is back and at almost full strength, while the consumer sector continues its slow movement. The UK market showed strong growth, which is somewhat surprising, but in the end, most of this growth was just a return to the pre-pandemic level.
Eastern European developments were shadowed by the outbreak of the war between Russia and Ukraine in February 2022. Even so, tissue consumption grew by 1.2% despite the 23% collapse in Ukraine, which was less than our expected decline of almost 40%. The country produced 107,000 tonnes of tissue, down from 138,000 tonnes in 2021 but still a surprising volume in the war conditions of 2022. In Russia, both production and consumption grew. Essity worked through the year despite announcing plans to withdraw from the country, and Hayat Kimya added one large paper mill that started up just before the “special operation” of Russia started in Ukraine. In most other countries of the region, tissue business continued as usual.
In 2022, Latin America partly recovered from the pandemic, which badly hit it, thanks especially to strong growth in Brazil. Meanwhile, Mexico showed slow improvement and other countries varying developments. As a whole, our current data shows 2.6% growth for the region in 2022.
In the Near and Middle East, demand growth averaged 4.2% in 2022. The tissue market in Turkey recorded strong growth of 5.6% and Saudi Arabia, the second-largest consumer, 4.9%, supported by oil price increases boosting economic growth to 7% in 2022.
Thanks to strong domestic production, Japanese tissue consumption showed growth of 3.2% in 2022. That is an exceptionally good growth rate in the country, which normally shows only 1.0% growth rates or even less.
China’s developments surprised us with weak performance, but obviously the outbreak of the pandemic – despite strong control measures, which led to major lockdowns, travel restrictions and an economic slowdown – had a greater-than-expected impact on Chinese tissue production, which grew by only 3.2% in 2022, according to a recent speech by Dr. Cao Zhenlei, director of CNHPIA. While Chinese tissue exports grew in 2022, domestic consumption showed an exceptionally slow growth rate of 1.9% in 2022. But again, it is likely that stock levels reduced and actual domestic tissue usage was higher although not measurable Fastmarkets.
Tissue consumption in Asia Far East showed a good average growth rate of 4.5% in 2022, despite the small contraction in the largest market, South Korea. But other countries – such as Indonesia, India, the Philippines, Taiwan, Thailand and Vietnam – supported the regional growth.
Oceania, mainly Australia, showed a return to the record consumption level of 2020. It looks like the region is back on its traditional growth trend line again. This meant a major growth of more than 11% in 2022.
Our current African figures suggest growth of 4.2% for 2022, although many foreign trade figures are still unavailable, except for a few leading countries. South Africa, Algeria and Egypt in particular contributed to the growth last year.
We are not very optimistic about the outlook for 2023 tissue demand, given the current global economic and political situation. The Western world will be in a slowing economic mode, although the worst expectations for a deeper recession may not be realized in 2023. China is expected to climb back to higher growth in its tissue demand, and many other markets in emerging economic regions are likely to grow well. Our brand new outlook for growth in global tissue demand in 2023 is 2.8%, below the long-term growth line. But forecasting is always affected by many sudden events and is a difficult issue, especially predicting the future!
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