Thai packaging firm warns Middle East conflict could drive prices up

A Thai plastic packaging firm said on Friday (April 3) that plastic material costs for the company had doubled following the conflict in the Middle East, raising concerns over possible supply shortages.

Eka Company, a plastic packaging manufacturer based in Chachoengsao province in south-central Thailand, said domestic supplies of plastic pellets were tight, with some producers halting operations and others cutting output. The company's chairman and group chief executive, Chaiwat Nantiruj, told Reuters that customers, concerned about potential shortages, were bringing orders forward.

The company said it could manage in the short term but warned that disruptions to oil and gas supplies from the Middle East could lead to a global shortage of materials in the coming months.

Disruptions to oil and petrochemical flows through the Strait of Hormuz following the outbreak of war involving Iran have tightened global chemical supplies and pushed prices of plastics and polymers — used in everything from auto parts to toys — to around four-year highs.

Production: Artorn Pookasook, Napat Wesshasartar/Reuters