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🇸🇬 Singapore /Economy & Trade

Asia’s vendors grapple with rising costs of ever-present plastics

From The Straits Times · () English

Summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • Food vendors across Asia are facing rising costs for plastic products due to the energy crisis triggered by the Middle East war.
  • Prices for plastic bags have increased significantly, impacting vendors' profits as they hesitate to raise prices for consumers.
  • While a US-Iran deal has been reached, market recovery and supply chain normalization are expected to take time, with ongoing concerns about the Strait of Hormuz.

Food vendors throughout Asia are struggling with the escalating costs of plastic materials, essential for their daily operations. The surge in prices is a direct consequence of the energy crisis exacerbated by the conflict in the Middle East. This situation is forcing vendors to absorb increased expenses, as they are reluctant to pass the costs onto their customers.

We use them everywhere. Our food containers are also plastic, all disposable.

— Li Yu-pingDescribing the essential role of plastic products in her food business.

In Taipei's Songjiang market, a chicken vendor reported a nearly 60% price increase for plastic bags and a one-third rise for plastic trays. "We use them everywhere," she noted, emphasizing the ubiquity of disposable plastic items in her business. Similarly, a vegetable seller in Bangkok estimated a 30% rise in operating costs, attributing the decline in profits to the ongoing conflict.

The core issue stems from ethylene, a key raw material for plastics, which is derived from naphtha, an oil by-product. Approximately 60% of Asia's naphtha imports originate from the Gulf. The prolonged closure of the Strait of Hormuz, a vital shipping route, has led to supply shortages and soaring prices. Consequently, petrochemical companies, particularly in South Korea and Japan, have reduced production, driving up the cost of basic plastic goods.

All of this has become a cost for the vendors.

— Li Yu-pingExplaining the financial burden of rising plastic costs.

Vendors express a lack of practical alternatives to plastic. "We have no choice. If you don't give customers plastic bags, they complain," said a grocer in Taipei. Many feel compelled to continue using plastics for convenience and customer satisfaction, despite the financial strain. While some customers have begun using reusable bags, the widespread reliance on disposable plastics persists.

I rely on plastic bags for my work because I sell vegetables on the go to busy people and office workers.

— Nikorn Sai-intharaJustifying the continued use of plastic bags in his business.

Although a recent deal between the US and Iran has led to a cautious reopening of the Strait of Hormuz, its impact on naphtha prices has been minimal so far. Manufacturers are still processing naphtha acquired at higher prices, and some, like Taiwan's Formosa Petrochemical, have reduced their ethylene steam cracker utilization rates. The situation remains challenging as markets adjust to the disrupted supply chains and volatile energy prices.

We have no choice. If you don't give customers plastic bags, they complain.

— Chang Chiu-hsiangExpressing the difficulty of finding alternatives to plastic bags due to customer expectations.
DistantNews Editorial

Originally published by The Straits Times. Summarized and contextualized by our editorial team with added local perspective. Read our editorial standards.

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