Whalesbook
Material Costs Skyrocket
The core issue is a sharp rise in the cost of raw plastic materials. Global oil supply disruptions, particularly through the Strait of Hormuz, have worsened the situation. Polymer producers increased prices five times between March 1 and March 11, leading to an overall cost jump of about 59%. This affects common plastics like LDPE, LLDPE, HDPE, PP, PVC, and PET.
Industries Feeling the Pressure
Many manufacturers are feeling the financial pinch. K P Namboodiri's, an Ayurvedic products company in Kerala, saw its packaging material costs jump 25-50%. The company is considering raising its consumer product prices by 15-25%. The footwear sector is also hit hard, as soles made from polyethylene are now extremely costly. The managing director of VKC Group stated that product prices could climb 30-40% if this trend continues.
Supply Chains Affected Regionally
The disruption isn't limited to Kerala; manufacturers in Karnataka and other areas report significant supply chain issues. Many small and medium-sized businesses (MSMEs) with low stock levels are struggling to meet demand at old prices. As a result, some buyers are looking for suppliers who have more inventory on hand.
Industry Asks for Government Help
Industry leaders are calling for urgent government action. They are requesting support like financial aid, subsidies for transport costs, or a temporary cut in import duties. These measures would help ease the burden on businesses and stabilize supply. Without intervention, more price increases and operational problems are expected.