Jakarta (VNA) - Indonesia's food and beverage industry has begun to feel pressure from rising costs of production-supporting materials, particularly packaging inputs, as the widening impact of tensions in the Middle East disrupts global petrochemical supply chains.
According to the Indonesian Bottled Water Business Association (Amdatara), packaging costs, which account for the largest component of product pricing, could rise by as much as 45% if supply disruptions persist.
Amdatara Chair Karyanto Wibowo stressed that oil is a key input for plastic production, meaning that any fluctuations in oil prices directly affect manufacturing costs.
In addition to rising prices, several types of plastic materials have also become increasingly scarce. The Indonesian Food & Beverage Industry Association (GAPMMI) reported that businesses have received price increase notices from suppliers, while some materials have become harder to obtain than before.
The Indonesian Packaging Federation (IPF) warned that plastic raw material prices could increase by between 80% - 100% due to disruptions in the global petrochemical supply chain, a surge that could create a “double shock” for businesses - shortages of raw materials alongside rising costs.
One of the main causes is the disruption of raw material shipments through the Strait of Hormuz, one of the world’s most strategic maritime routes.
Petrochemical firm Chandra Asri Pacific has already declared force majeure and reduced operating capacity due to disruptions in feedstock supplies. This has directly affected petrochemical products such as olefins and polyolefins - key materials used in the packaging, automotive and construction industries.
The Association of Plastic Industry of Indonesia (Inaplas) warned that the impact may become more visible after Eid al-Fitr, when companies begin signing new contracts amid volatile prices and supply conditions. Many factories are currently prioritising the fulfilment of existing orders, while new contracts are being considered with greater caution.
Despite the challenges, the Ministry of Industry said retail prices have not yet been affected, as current products are still being manufactured using existing inventory.
Putu Juli Ardika, an official from the ministry, affirmed that goods supply for the upcoming festive season remains stable. However, the ministry is coordinating with relevant stakeholders to devise solutions aimed at mitigating the potential impacts in the near future./.
VNA
