Plastic Bags in Indonesia and War Zones Thousands of Miles Away

Plastic retailer Nani Kahaya noted that the price hike came "unexpectedly," with procurement costs rising significantly. Some vendors switched to selling plastic bags in packs of 10, while smaller shops stopped providing free bags and began wrapping goods in banana leaves. These once-underrated plastic bags are now being carefully evaluated for reuse. A mobile vendor revealed that cost pressures have become too severe to be offset by price adjustments.

Pramono Anong, Governor of Jakarta Special Region, stated that under cost pressures, some merchants have reverted to traditional packaging methods such as banana leaves.

Data from the Indonesian Olefins, Aromatics and Plastics Association shows that national plastic prices have risen by approximately 30% to 50% since March. Affected by unstable raw material supply, some manufacturers have suspended order acceptance. Companies are seeking alternative supply sources outside the Middle East, but prolonged transportation cycles have led to increased costs and uncertainties.

The root cause of this round of price fluctuations lies not in Indonesia itself, nor is it limited to plastic products alone, but rather in the chain reaction triggered by geopolitical instability in the Middle East.

Naphtha serves as the upstream feedstock for plastic bags, derived from petroleum. The Middle East stands as one of the world's key energy supply regions. Official statistics reveal that approximately 70% of Indonesia's petrochemical feedstocks originate from this area, with the country's naphtha consumption being virtually entirely dependent on imports. By 2025, around 67.61% of Indonesia's plastic products will be used in packaging applications, extensively penetrating consumer sectors including food and retail. Supply chain disruptions caused by the Strait of Hormuz have triggered ripple effects through energy and chemical industries, ultimately impacting daily life. The Indonesian Market Traders Association warns that rising plastic prices may persist, placing significant pressure on street vendors and small-scale businesses reliant on plastic packaging solutions.

Indonesian Trade Minister Budhi Santoso stated that geopolitical shocks have disrupted supplies of key raw materials like naphtha, which is part of the war's spillover effects. These price fluctuations aren't limited to Indonesia. In South Korea, tensions in the Middle East have tightened naphtha supplies, leading to restrictions on plastic bag purchases in some regions. ASEAN countries including Thailand, the Philippines, and Vietnam are experiencing varying degrees of pressure from upstream raw material shortages, with costs now being passed on to consumers. The impact extends beyond plastic products. Petroleum is used in chemical production, fiber manufacturing, rubber processing, fertilizer production, and pharmaceuticals, with some daily chemical product prices already showing upward trends. Luhut, Chairman of Indonesia's National Economic Council, emphasized that Middle East instability has once again highlighted the fragility of global energy and supply systems. The current price volatility stems from multiple factors beyond geopolitics. The Indonesian rupiah's continuous depreciation against the US dollar has dropped below 17,000 rupiah per dollar, significantly increasing import costs. The convergence of domestic and international pressures has turned a simple plastic bag into a crossroads connecting global markets, local economies, wartime tensions, and everyday life.