Polybag prices rise 80% due to surge in raw material costs caused by Israel–Iran war

TIRUPUR: Polybag prices have increased by nearly 80% following a sharp increase in the prices of raw materials derived from naphtha, a petroleum product, due to the West Asia conflict. Polybag manufacturers in Tirupur have said they are hesitant to take new orders as raw material prices continue to rise every day.

Garments produced in Tirupur for both domestic and international markets are packed in polybags to ensure safe transportation. To meet the needs of the garments sector, about 60 polybag manufacturing units, around 200 trading companies and nearly 100 small firms engaged in polybag cutting work on a job-work basis operate in Tirupur. Most of these units involved in polybag production are small and micro enterprises.




The main raw materials used for polybag production are polypropylene (PP) and low-density polyethylene (LDPE), which are produced from the petroleum product naphtha. In the past 15 days, the prices of these raw materials required for polybag manufacturing have increased by around 80%, said K S Loganathan, former vice-president of the Tirupur Plastic Manufacturers Association.

He said these raw materials, which were sold at Rs 110 per kg at the end of February, are now being sold between Rs 170 and Rs 190 per kg. As a result, polybag manufacturers have increased polybag prices to manage the rising production costs.

Polybags that were earlier sold for Rs 2 each are now being sold between Rs 3 and Rs 4. Loganathan said that due to the sharp increase in prices, traders who earlier supplied 10 tonne of raw materials per day are now limiting the supply to just one tonne, which has made it difficult for manufacturers to finalize orders.

According to him, raw material prices are increasing by Rs 10 to Rs 20 every day, causing losses on previously confirmed orders. Some export clients bear part of the increased cost, which has helped manufacturers manage the situation to some extent.

However, polybag manufacturers have been reluctant to accept new orders for the past four days, and if the situation continues, several units may be forced to shut down next month. This could lead to job losses for nearly 20,000 workers who depend on this industry, he added.