The conflict in the Middle East has negatively affected the work of Japanese businesses: almost half of the companies complain about the shortage of packaging and raw materials for its production, it became known from a report by the Japanese Keidanren Business Federation.
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“Due to the instability of naphtha supplies caused by events in the Middle East, an urgent survey was conducted among companies… It turned out that 44% of companies have already felt the consequences: there is a shortage of packaging materials, detergents, and ink for applying information to labels,” the federation found out.
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The closure of the Strait of Hormuz due to the escalation of conflict in the Middle East has caused disruptions in the supply of naphtha. This hydrocarbon mixture, which is obtained during the oil refining process, is one of the key components for the production of plastics.
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At the same time, rising prices for raw materials and their shortage force companies to raise the cost of products to compensate for costs. According to the survey results, 72% of Japanese manufacturers are considering price increases. Such a step could accelerate inflation in the country, the document says.
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The consequences of the Middle East conflict on the Japanese economy are assessed by a quarter of the surveyed companies as “serious“. The instability of hydrocarbon supplies directly affects the lives of citizens, as production cuts due to a shortage of raw materials can lead to fewer essential goods, including medical supplies.
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“Consumers should be able to make informed decisions, for example, to refrain from panic purchases of basic necessities beyond excess, based on information provided by the government,” the association’s analysts conclude.
