(April 30): Food and drink prices in Japan are set to increase as early as this summer due to a war-driven shortage of a critical ingredient used in plastic packaging, according to a report by corporate research firm Teikoku Databank Ltd.
Prolonged disruption to energy flows via the Strait of Hormuz has cut the availability of naphtha, prompting suppliers of polypropylene and polyethylene packaging derived from the petrochemical feedstock to demand higher prices with immediate effect. Small and mid-sized food manufacturers are beginning to feel the impact, the report said.
The two-month-old war in the Middle East has upended global oil and gas markets, putting much of Asia in a vulnerable position as countries — including Japan — rely heavily on imports from the region. The shortage of petroleum products has affected sectors from food production to medical equipment makers.
The Teikoku Databank report, published Thursday, covered food and beverage products that have experienced or are expected to see price increases through September. Confectionery, including chocolate, was among the categories likely to be most affected by price rises.
Japan’s core consumer prices, excluding fresh food, rose 1.8% in March from a year earlier. That topped the median economist estimate and compared with a 1.6% advance in the prior month.
The measure excluding both fresh food and energy — closely watched by the Bank of Japan as a gauge of underlying inflation — increased 2.4%, remaining above the central bank’s 2% target. Overall inflation including all items accelerated to 1.5%.
See also: Toyota issues lower outlook on Iran conflict supply impact
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