MethodologyContact usSupportLogin
If you source paper-based packaging for food, snacks, dairy or beverages, the sack kraft market is one to watch closely. Recent insights from Brazil’s largest packaging paper producer, Klabin, point to shifting fundamentals that could influence how you plan and negotiate.
The global supply-demand balance for extensible sack kraft has been adjusting in recent months, leading to shifts in market dynamics, executives from Brazil’s largest packaging paper producer, Klabin, told Fastmarkets in an interview on Tuesday June 2.
According to Laura Bretanha Herter, head of operations sack kraft at Klabin, despite a historical correlation between sack kraft prices and kraftliner, the current business environment has been changing this scenario, with sack kraft becoming a more specialized market with its own fundamentals compared with other packaging segments.
While demand remains supported by steady, resilient growth, particularly in specific construction-related niches, supply has been impacted by recent closures of non-competitive capacity and is facing cost pressures linked to the conflict in the Middle East.
“In addition to the shutdown of Mondi’s mill in Bulgaria, which reflects a structural reduction in supply in Europe, sack kraft producers in the region are facing high energy costs,” Herter said.
The market is also closely watching a proposed new sack kraft machine project in Canada by Mondi, but Fastmarkets reported in October 2025 that the project was paused due to macroeconomic conditions.
“There is market sentiment that this project could be viable, as demand for kraft paper for wrapping has been growing in the US and Canada since 2024, when Amazon, Walmart and other large retail companies started to apply more of this paper in e-commerce,” Fastmarkets’ associate economist Paula Reis said.
The investment would be aimed at supplying the US market, which recorded 5% demand growth in 2025 to 3 million tonnes of kraft and specialty packaging papers, which should increase by a further 1.6% in 2026, Reis said.
US Multiwall paper, aimed at cement and other heavy-weight industries, registered shipments of 389,000 tonnes in 2025, according to Fastmarkets’ estimates, a 13.1% annual increase, with further 6.7% growth projected for 2026.
Data from the American Forest & Paper Association shows that US unbleached packaging paper production increased by 5.4% year on year to 520,000 tons for all bag and sack grades in the first quarter of 2026. March production alone of unbleached packaging paper was up by 5% at 190,000 tons.
“Sack kraft machines, particularly extensible grades, are not suited to easily switch production. The high technical requirements of these products demand specific equipment configurations,” Klabin’s packaging director Douglas Dalmasi said, assessing current global supply volumes.
Mexico is emerging as another key market for extensible sack kraft, he added, with growing consumption and limited supply availability and no short-term prospects for greenfield projects.
“In addition to robust domestic demand, Mexico’s construction sector is closely tied to the US. This consumption trend has intensified in the run-up to the World Cup,” Dalmasi said.
Turning to the Latin American market, Fastmarkets’ assessments indicate that Brazilian consumption of extensible sack kraft is also going through a positive phase, driven by stronger volumes from the construction sector, including cement, mortar and gypsum, followed by more fragmented segments such as food, chemicals, seeds and pet food.
“This is a stable and resilient demand base, strongly linked to essential sectors. Technical barriers also limit substitution possibilities,” Klabin’s packaging director added.
Cost inflation, however, may weigh on end-use consumption.
According to Fastmarkets’ latest pricing report, sack kraft, unbleached extensible 78-85 g list, fob Brazil rose by 5.83% in May compared with April, reaching 5,300-5,600 Reais ($1,024-1,082) per tonne, supported by stronger export conditions and improvements in the domestic market.
In Europe, underlying demand for sack kraft is growing, but in a conservative way, according to Fastmarkets’ economist for the region, Camila Jaramillo. In 2025, sack kraft demand increased by 2.8% to around 1.25 million tonnes, with another 2.0-2.6% growth forecast for this year.
“There is plenty of uncertainty in the economy, and increased high inflation together with high savings rates have been affecting investment and construction activity,” she said.
Operating rates in this market should remain at lower levels between 87-90% over the next two years, but overcapacity is not a big problem in Europe, Jaramillo said. “It is a challenging operation for a newcomer, as investments are capital-intensive with the demand for good-quality softwood.”
According to her, Europe is still the main global sack kraft supplier, with net exports of 993,000 tonnes in 2025. While sales to the US dropped by 77% (4,144 tonnes) in 2025, and imports from Brazil increased by 30% (6,129 tonnes), these changes only translate into a 1.8% decrease in European net imports compared with 2024, as Europe remains a strong supplier in other regions.
For food and beverage procurement teams, these shifts in sack kraft supply, cost and regional dynamics are signals worth tracking as you plan ahead. To learn more about how we can help you navigate these market trends and optimize your paper packaging costs, visit our food and beverage industry page.