Consumers across Asia are set to face higher grocery bills in the coming months, driven by soaring packaging costs stemming from a conflict involving Iran. This situation has triggered a severe shortage of the plastics essential for transporting food from farms to markets.
The disruption in plastic supply has caused packaging costs to surge dramatically, and some companies are now beginning to pass these increases on to customers. A key global food price indicator is hovering near a three-year high, and further price hikes could compound the difficulties for households already grappling with elevated fuel costs.
At the heart of the crisis is the near-total closure of the Strait of Hormuz, which has choked off the flow of energy supplies—much of which are destined for Asia—including a petroleum refining byproduct known as naphtha, a fundamental raw material for plastic manufacturing. While some progress has been made toward a long-term agreement to end the conflict that began in late February, restoring supply to pre-conflict levels may still take considerable time.
In Vietnam, Nguyen Hoang Liem, Head of International Business for Minh Phu Seafood Corp., noted that plastic packaging costs have skyrocketed by approximately 50% since the conflict's onset. He stated that the company, the country's largest exporter and locally known as the "Shrimp King," is currently absorbing these added expenses but ultimately plans to raise prices for consumers.
In Malaysia, Farm Fresh Bhd. Chief Financial Officer Mohd Khairul Mat Hassan reported that the company has already increased prices for some dairy products, implementing its first price hike since 2023 in June. He revealed that this packaging disruption, unprecedented in the company's 17-year history, has forced the group to use smaller cartons while scrambling to find alternatives. "All three of our plastic bottle suppliers rely on HDPE resin producers whose naphtha comes from the Middle East," Mohd Khairul said, adding that consumer preference exacerbates the issue. "Many people still prefer plastic bottles—they are easier to hold, sturdier, and for many consumers, the flavor is better."
Major naphtha importers Japan and Korea have been compelled to purchase more naphtha from other countries to cover the shortfall, and these higher import costs are gradually being passed on to manufacturers across the region. According to plastic container manufacturer Chai Heng Plastic Mfg (M) Sdn., it has raised prices for some products by up to 20%.
In Japan, a spokesperson for the country's largest egg carton supplier, Kurihara Seisakusho Co., said the company raised prices this month after maintaining stable supplies under procurement costs that would be "unimaginable under normal circumstances."
Thailand's rice industry is also under pressure, with packaging costs rising by up to 40%, according to the Thai Rice Packers Association. "So far, rice packers have tried to absorb these increases, but it's unclear how much longer they can hold on," said the association's president, Yongyut Phurkmahadamrong.
In northeastern Australia, Shaun Jackson, a Director at Daintree Fresh, which exported around 200,000 boxes of melons to Japan last year, said the company is currently battling rising costs for plastic mulch used to suppress weeds. He added that this comes on top of increased fuel and fertilizer expenses. "We are being smashed," Jackson said, estimating the company's total costs this year could be up to 50% higher. "The real tragedy is there is strong demand for us in the Japanese market. But I have to go over there and tell them I can't grow the crop for them this year because our costs are too high."
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