Toy prices soar as West Asia conflict raises raw material costs

Chennai: It is that time of the year when parents buy toys to keep their children engaged during the summer holidays. But this season could be harsh, with toy prices soaring due to the West Asia conflict, amid a surge in crude-linked raw material costs. Prices in some categories have already risen.Shabbir Gabajiwala, president of The All India Toy Manufacturers Association (TAITMA), said that toy prices could increase anywhere between 10% and 40%, depending on the composition of plastics used in the products. For instance, building blocks, children's ride-ons, toy guns, and some variants of toy cars are made entirely of plastic."While some manufacturers have effected price increases, others are in the pipeline. The reason is that the cost of plastics has spiralled by 70%, from Rs 100 per kg to Rs 170 per kg over the past month. Though the recent US-Iran war ceasefire has helped marginally ease prices, bringing them down to Rs 150 per kg, we are not sure when prices will return to previous levels, impacting our production costs," he said.The immediate impact of the ongoing conflict on the toy manufacturing sector has largely been on costs. The primary pressure comes from raw materials—especially plastic resins—which are closely linked to crude oil prices. The conflict has led to an increase in the cost of inputs such as ABS (acrylonitrile butadiene styrene), PP (polypropylene), PVC, polyethylene (PE), and packaging, according to the industry.Leading toy manufacturer Funskool India said plastics and packaging form a significant portion of manufacturing costs. "The most impacted inputs are plastic resins such as ABS and PP, which have seen increases in the range of 40% to 60% over the past month. In addition, there has been a rise in the cost of masterbatches and additives, packaging materials, and freight.The sharp increase in input costs is beginning to put pressure on margins. If current trends persist, a price increase may become necessary. Toy prices could rise by 5% to 10%, depending on the product category and the extent to which manufacturers are able to absorb costs. In the near term, companies may absorb part of the increase, but sustained cost pressures will eventually need to be passed on to consumers," said K A Shabir, CEO, Funskool India.Gujarat-headquartered Aditi Toys said that apart from ABS, PP, and PVC, electronic components have also seen price increases of around 5%–7%. Its founder, Subhashbhai Balubhai Zala, said the rise is largely driven by global crude oil volatility and supply disruptions, directly impacting manufacturing costs."Due to rising input costs, prices have increased by up to 30% in certain categories at Aditi Toys. However, the domestic market has not been significantly impacted, with only a slight slowdown in demand. This indicates that consumers continue to prefer quality and branded products, even at slightly higher prices," he said.
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