Plastics shortages to keep food prices high after war disruptions
SINGAPORE - Asian consumers will be facing higher grocery bills for months thanks to costly packaging stemming from the Iran war, which created severe shortages of plastics needed to get food from farms to market. Disruptions to plastics supply have led to a sharp increase in packaging costs, which
SINGAPORE - Asian consumers will be facing higher grocery bills for months thanks to costly packaging stemming from the Iran war, which created severe shortages of plastics needed to get food from farms to market.
Disruptions to plastics supply have led to a sharp increase in packaging costs, which some companies are now starting to pass on.
A gauge of global food prices is already near a three-year high, and further gains risk compounding the pain for households that are also contending with higher pump prices.
At the core of the fallout is the near-total closure of the Strait of Hormuz, which choked off energy flows – most bound for Asia – including a byproduct of oil refining known as naphtha, the building block of plastics.
While some progress has been made toward a lasting agreement to end the war that started in late February, a return to pre-conflict levels of supply will likely take time.
In Vietnam, Minh Phu Seafood has seen plastic packaging costs surge by about 50 per cent since the war started, said Nguyen Hoang Liem, the general director of the company’s unit responsible for international trade.
Known locally as the Shrimp King, the country’s biggest exporter is absorbing the higher expenses but is planning to raise prices for consumers eventually, he said.
Malaysia’s Farm Fresh has already increased prices for some of its dairy products, boosting them in June for the first time since 2023, chief financial officer Mohd Khairul Mat Hassan said.
The packaging disruptions were the first of their kind for the company in its 17-year history, and forced the group to use smaller, paper cartons while scrambling for alternatives, he said.
“All three of our plastic bottle suppliers are dependent on producers of HDPE resin, which source their naphtha from the Middle East,” said Mohd Khairul, adding that consumer preferences had exacerbated the problem.
“A lot of people still like the plastic bottle – it’s easy to hold, it’s sturdier, and for a lot of consumers, the taste profile is better.”
Major naphtha importers Japan and South Korea have been forced to buy more from other countries to offset the shortfall, with higher import costs feeding into regional manufacturers.
Chai Heng Plastic, a maker of plastic containers used across Malaysia and Singapore, has boosted prices by as much as 20 per cent on some products, according to the company.
In Japan, Kurihara Seisakusho – the country’s biggest supplier of egg cartons – raised prices in June after keeping supply stable at procurement costs that would be “unimaginable under normal circumstances”, said a spokesperson.
Thailand’s rice industry is also under pressure, with packaging costs up as much as 40 per cent, according to the Thai Rice Packers Association.
“Rice packers have been trying to absorb the increases so far, but for how much longer is unclear,” said Yongyut Phurkmahadamrong, the president of the association.
In Australia’s north-east, Daintree Fresh – which exported around 200,000 boxes of melons to Japan in 2025 – is grappling with the rising cost of plastic sheeting that’s used to suppress weeds, said director Shaun Jackson.
That comes alongside elevated expenses for fuel and fertiliser, he added.
“We’re being destroyed,” Jackson said, estimating the company’s overall costs are likely to be as much as 50 per cent higher in 2026.
“The really sad case is that I’ve got strong demand from Japan. I had to go over there and tell them that I can’t grow for them this year because our costs are too high.” BLOOMBERG