Why does my cat chew paper?

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Cats are playful animals and some discover that there is fun to be had from shredding paper.

(Q) Why does my cat chew and eat paper, even the newspaper I'm reading?

(A) Behaviourist Jon Bowen says: Cats are playful animals and some discover that there is fun to be had from shredding paper. This is perhaps more likely if a cat is kept in an environment without much other stimulation, such as appropriate toys, but some cats do just love the sensation of ripping paper.

And the fact that your cat will do it even while you are holding a newspaper tends to indicate that there may have been a degree of human encouragement in the past!

I suggest that you learn to live with this behaviour, even to the extent of leaving out paper for her to rip up. Provide activity feeders as well as free outdoor access and plenty of play. This may, in the long run, reduce the amount of paper ripping, but be prepared to accept that, as long as she has no health consequences arising from it, paper ripping will always be an activity that she enjoys and wants to engage in.