Bangladesh’s plastic industry is facing mounting pressure as the ongoing conflict involving Iran, Israel and the United States in the Middle East drives up global oil prices and disrupts the supply of petrochemical raw materials.
Plastic industry insiders say raw material prices have surged by more than 40%, forcing manufacturers to scale back production, increase product prices, and reassess supply strategies. If the crisis continues, sectors heavily dependent on plastic packaging—including food, pharmaceuticals and garments—could face significant disruptions.
Plastic products are primarily made from petrochemical derivatives produced from crude oil, a large portion of which is sourced from the Middle East.
More than half of Bangladesh’s plastic raw materials originate from countries in that region.
Supply chain disruptions have intensified due to heightened tensions around key maritime routes, particularly the Strait of Hormuz, one of the world’s most critical oil shipping corridors.
Shipping delays, rising freight charges and higher insurance premiums have added to the overall import cost.
Global crude oil prices have also surged sharply. Before the escalation of hostilities, Brent crude was trading at around $72 per barrel.
According to data from OilPrice.com, the price rose to about $102 per barrel on Wednesday, directly affecting petrochemical feedstock prices.
Industry sources said the price of plastic raw materials, which ranged between $900 and $950 per tonne before the conflict, has now climbed to nearly $1,500 per ton.
Rising logistics and freight costs have further compounded the financial burden on manufacturers.
RFL Group, one of Bangladesh’s leading plastic manufacturers, consumes around 10,000 tons of raw materials monthly and produces more than 5,000 different plastic products using nearly 10 types of materials. About 60–70% of its raw materials are sourced from China.
Talking to the media, RN Pal, managing director of RFL Group, said that raw material prices have increased by 40–50% due to the ongoing war.
“We have already raised product prices by around 10–15% to cope with the rising production costs. If the situation does not improve, prices may need to be increased by another 15–20%,” he said.
Akij Plastics Limited, which manufactures furniture, toys, and household products, imports about 3,000 tons of polypropylene (PP) each month, nearly 90% of which comes from Middle Eastern suppliers.
Minhaj Bin Mizan, chief operating officer of Akij Plastics, said the company has already reduced production by around 20% due to higher raw material prices and ongoing energy shortages.
“If the conflict continues, further production cuts may become unavoidable,” he added.
According to the Bangladesh Plastic Goods Manufacturers and Exporters Association (BPGMEA), the domestic plastic market is valued at approximately Tk50,000 crore. The sector includes nearly 6,000 small and large factories and employs around 1.5 million workers directly.
In addition, about 30,000 industries—including food processing, pharmaceuticals, garments and consumer goods—depend on plastic products for packaging and distribution.
Regarding this, BPGMEA President Shamim said Bangladesh requires nearly 1.7 million tons of plastic raw materials annually, of which about 1.5 million tons are imported.
“If imports decline significantly, many small and medium-sized factories will be forced to shut down,” he warned.
He added that plastic packaging remains essential for the safe storage and transportation of food and pharmaceutical products, making the sector critical to supply chain stability.
ACI PremiAflex Limited, a subsidiary of ACI Group specializing in flexible packaging, consumes about 2,000 tons of plastic raw materials per month, with roughly 90% sourced from imports.
On this aspect, Anisur Rahman, Executive Director of ACI PremiAflex, said the company has been importing raw materials at nearly 20% higher prices since the conflict began.
“Flexible packaging materials are almost entirely petroleum-based. Any increase in their cost will ultimately raise the prices of packaged food, medicines and daily consumer products,” he said.
Luna Polymer Industries, which manufactures plastic bottles and packaging solutions, requires approximately 500 tons of raw materials monthly. About half of its supplies come from Middle Eastern countries, while the rest are sourced from India, China, Taiwan and Thailand.
Managing Director ASM Kamal Uddin noted that plastic raw material imports are subject to around 32% taxes, while access to bank financing remains limited.
“With rising raw material prices and limited financial support, the plastic industry could face severe stress in the coming months,” he said.
He also mentioned that India temporarily halted raw material exports during the early phase of the conflict, though shipments have recently resumed. However, prices have increased by nearly $800 per tonne compared to earlier levels.
Economists and industry experts warn that prolonged disruptions in raw material supply could trigger a chain reaction across multiple sectors.
Since plastic packaging is widely used in food, beverages, pharmaceuticals, cosmetics and garments, rising production costs could eventually push consumer prices higher.
They also caution that continued volatility in global oil and petrochemical markets may intensify inflationary pressures in Bangladesh’s domestic market.
Industry leaders have urged the government to explore alternative sourcing markets, promote plastic recycling and consider reducing import duties temporarily to ease cost pressures.
Without timely intervention, stakeholders fear that the country’s plastic sector—one of the key supporting industries for manufacturing and exports—may face prolonged operational disruptions in the months ahead.
