Retailers monitoring situation as Iran conflict pushes up chemical and packaging costs

Roughly seven weeks since hostilities began in the Middle East, ripples are being felt in the manufacturing sector. Another fuel price increase may be on cards, while suppliers of chemicals and packaging plastics have warned clients to plan ahead. The escalating cost of materials and transport could soon be felt even harder by consumers, with retailers saying they are monitoring the situation.

A ceasefire between the United States and Iran was agreed to last week, but negotiations between the US and Iran in Pakistan ended in a stalemate. As of Wednesday, the United States had implemented a blockade of the Strait of Hormuz, aiming to suffocate Iran’s shipping abilities. In a circular seen byThe Citizen, a national solvents supplier also told its clients there would be varying increases in chemicals vital to household consumer goods.

“Ongoing geopolitical tensions in the Middle East continue to disrupt key shipping routes and oil supply chains. Combined with rising global crude oil prices and the weakening of the rand against the dollar, these pressures have driven up solvent costs significantly,” the notice reads. The solvents include methanol, benzine, xylene, acetone, toluene, n-propanol and alchol solvent.

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These chemicals are used in a wide variety of household products such as toiletries, personal care products, detergents, varnishes, paints and more. Additionally, clients of an East Rand packaging company were alerted to April price increases. The company warned that deliver timelines could be affected, with prices set to change at short notice. “The plastic industry is currently experiencing significant instability due to ongoing supply shortages and unpredictable cost increases.

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