how is litmus paper formed

As the name implies, paper is the primary ingredient in litmus paper. The wood used to make the paper is treated with solvents to get rid of extraneous substances such as lignin and resin; it is then infused with lichen, which is interestingly two organisms--an algae and a fungus--sharing one existence. Two popular varieties of lichen are used in litmus paper, Roccella Tinctoria and Lecanora Tartarea.
Activation

It is the lichens that turn regular paper into litmus paper, one that can distinguish between acids and bases. To properly infuse the paper with the fungi, it is run through a lichen bath; the paper is then fermented with potassium carbonate and ammonia. After it has been allowed to dry, the litmus paper is cut and packaged.
Homemade Litmus

Red cabbage can be used to make red or blue litmus paper. Chopped up and mixed with a small amount of water, it makes a blue dye that can be dried on paper and used to identify acids. If vinegar is added to the cabbage instead of water, the liquid turns red. Once dried, it can be used to identify bases. 

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 Litmus paper is the most recognized member of chemical indicators. Like most pH paper, litmus changes color when exposed to an acidic or basic solution. The simple pH scale ranges from 0-14 with 0 being the most acidic, 7 being neutral, and 14 being the most basic or alkaline. Litmus paper is commonly used in educational science classes. Because it has such wide recognition, it has become a cultural reference in our society as well. It is common to use the term litmus test when referring to a test in which a single factor determines the outcome.

The primary raw materials used for making litmus paper are wood cellulose, lichens, and adjunct compounds. Litmus paper, as its name implies, is primarily composed of paper. The paper used to make litmus paper must be free of contaminants that could change the pH of the system it is measuring. Like most paper, litmus paper is made from wood cellulose. The wood is treated with solvents prior to paper manufacturing in order to remove resinous material and lignin from the wood. One of the most common solvents in the United States is a sulfate—either sodium sulfate or magnesium sulfate.

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