Ichsan Ali, Muhammad Miftakul Falakh, Ngawi, East Java – Prices of plastic packaging materials in Indonesia have surged sharply, with some products doubling in cost, as supply chain disruptions linked to escalating tensions involving Iran, the United States, and Israel ripple through global petrochemical markets.
Traders at Pasar Besar Ngawi reported that the price of virgin plastic packaging, including shopping bags, has climbed to as high as Rp 60,000 ($3.5) per kilogram, up from around Rp 30,000 just weeks ago.
"The price used to be around Rp 30,000. Now it has doubled to Rp 60,000 per kilogram," said Selamet, a local plastic trader.
The increase, which began during Ramadan, has intensified ahead of the Eid al-Fitr holiday and shows little sign of easing. Supply shortages have compounded the problem, with traders often receiving only partial shipments or none at all.
Recycled plastic products have seen more moderate increases, rising to about Rp 27,000 per kilogram from Rp 22,000-Rp 24,000 previously. However, other items, such as plastic cups widely used in the food and beverage sector, have also jumped in price. A pack of 50 22-ounce cups now costs Rp 22,000, up from Rp 13,000.
The price spike has weighed on consumer demand and squeezed traders' margins, with some reporting declining sales as customers delay purchases or cut back on usage.
Trade Minister Budi Santoso said the surge reflects geopolitical shocks affecting raw material supplies, particularly naphtha, a key material for plastic production that Indonesia largely imports from the Middle East.
"Many complaints have emerged over rising plastic prices. This is part of the impact of the war. One of the main raw materials for plastic is naphtha, which we import from the Middle East," Budi said in Jakarta on Wednesday.
Supply disruptions have been exacerbated by constraints in the Strait of Hormuz, a critical shipping route for global oil and petrochemical flows, limiting the availability of raw materials to manufacturers.
To mitigate the impact, the government is seeking alternative import sources, including from Africa, India, and the United States, though officials caution that shifting supply chains will take time.
"It cannot happen overnight. Moving from Middle Eastern suppliers to other regions requires adjustments, but we hope this process will stabilize prices," Budi said, adding that Indonesia is working with industry players and overseas representatives to secure new suppliers.
The disruption is not limited to Indonesia. Similar pressures have been reported across Asia, including in Singapore, China, South Korea, Taiwan, and Thailand, highlighting the global nature of the supply crunch.
According to the Indonesian Olefin, Aromatics, and Plastics Industry Association, around 70% of Indonesia's petrochemical raw materials originate from the Middle East. The supply shock has led to extreme price volatility and widened gaps between minimum and maximum price ranges.
Secretary General Fajar Budiono said shortages have become so severe that some manufacturers are reluctant to accept new orders due to uncertainty over raw material availability.
"Supply is extremely limited right now. Prices are rising, and the spread between the lowest and highest prices is widening significantly," he said.
Efforts to source alternative supplies from Asia and ASEAN have also faced obstacles, as major producers like China prioritize domestic demand.
Amid the ongoing disruptions, industry players are turning to innovation to sustain operations. Measures include increasing the use of recycled materials, exploring substitutes for plastic, and redesigning products to reduce raw material consumption.
"For now, innovation is the only way forward, while we wait for global supply conditions to normalize," Fajar said.