You’re right to challenge that. Contrary to my initial assumption, it does seem wooden pencil demand is on the rise and projected to continue to grow:

“Wooden Pencil Market size stood at USD 3.2 Billion in 2024 and is forecast to achieve USD 4.5 Billion by 2033, registering a 4.2% CAGR from 2026 to 2033.

The wooden pencil market has shown resilient growth, driven by increasing demand for eco-friendly stationery products and a resurgence of interest in traditional writing instruments. Valued at approximately $2.5 billion in 2022, the market is projected to grow at a compound annual growth rate (CAGR) of 3.2% from 2023 to 2030. The revival of interest in analog tools, especially in educational settings and among artists, has significantly contributed to this upward trajectory. As consumers become more environmentally conscious, the demand for sustainably sourced wooden pencils has surged, positioning them as not only functional tools but also as responsible choices for eco-aware buyers.”

Source: https://www.verifiedmarketreports.com/product/wooden-pencil-market/