Plastic shortage crisis sweeping Asia-Pacific: Several countries, including Shenzhen Agricultural Power Group and food giants, are forced to pass on costs, putting food supply chains to the test.

Notice that Asian consumers will face higher grocery bills in the coming months, attributed to the high packaging costs brought about by the Iran war, causing a severe shortage of plastic needed to transport food from farms to markets. The interruption in plastic supply has led to a sharp rise in packaging costs, and some companies are now starting to pass on these costs. The global food price index is approaching its highest point in three years, and further increases could add to the woes of families already grappling with higher fuel costs. The core of this disaster lies in the near-complete closure of the Strait of Hormuz, cutting off the flow of energy - much of which is destined for Asia - including a petroleum refining byproduct called naphtha, which is a key raw material for making plastic. Although some progress has been made towards reaching a long-term agreement to end the conflict that began in late February, it may still take some time for supplies to return to pre-conflict levels. In Vietnam, Nguyen Hoang Liem, who is in charge of international trade at Minh Phu Seafood Corp., said that plastic packaging costs have skyrocketed by about 50% since the war began. As the largest exporter in the country, this company, known locally as the "Shrimp King," is currently absorbing these increased costs but ultimately plans to raise prices for consumers. Mohd Khairul Mat Hassan, Chief Financial Officer of Farm Fresh Bhd. in Malaysia, stated that the company has already raised prices for some dairy products and implemented its first price hike since 2023 in June. He revealed that this packaging disruption is a first in the company's 17-year history, forcing the group to look for alternative solutions and use smaller cartons. All three of our plastic bottle suppliers rely on high-density polyethylene (HDPE) resin producers, and these producers source naphtha from the Middle East," Mohd Khairul said, adding that consumer preferences have exacerbated the issue. "Many people still prefer plastic bottlesthey're easy to grip, more durable, and, for many consumers, taste better." Major naphtha importing countries Japan and South Korea are forced to purchase more naphtha from other countries to make up for the shortage, and the higher import costs are gradually being passed on to manufacturers in the region. According to plastic container manufacturer Chai Heng Plastic Mfg (M) Sdn., the company has raised prices for some products by up to 20%. In Japan, Kurihara Seisakusho Co., the country's largest egg carton supplier, raised prices this month after maintaining supply stability under purchasing costs that were "unimaginable under normal circumstances," according to a spokesperson. According to the Thailand Rice Packaging Association, Thailand's rice industry is also under pressure, with packaging costs rising by as much as 40%. "So far, rice packaging businesses have been struggling to absorb these increases, but it is unclear how long they can hold out," said Yongyut Phurkmahadamrong, chairman of the association. In the northeastern part of Australia, Shaun Jackson, director of Daintree Fresh, which exported about 200,000 boxes of melons to Japan last year, said the company is currently grappling with rising costs of plastic mulch used to suppress weeds. He added that this is accompanied by increases in fuel and fertilizer costs. "We are being destroyed," Jackson said, estimating that the company's total costs this year could be up to 50% higher. "What's really sad is that there is a strong demand for our products in Japan. But I have to go there and tell them that I can't plant crops for them this year because our costs are too high."