A sharp shortage of polymers used in packaging is set to drive up prices of packaged milk and other essentials, as disruptions in raw material supply and energy inputs hit India’s plastic manufacturing ecosystem. The crisis is linked to reduced availability of key inputs like polypropylene and polyethylene, widely used in milk pouches and food packaging.
The supply shock has been triggered by diversion of LPG for household use and geopolitical disruptions in the Strait of Hormuz, tightening feedstock availability for petrochemicals. As a result, polymer prices have surged by 50–60%, with key grades like HDPE, LLDPE, and PP rising 50–70%, leading to acute raw material shortages.
The impact is already visible across industries, with plastic-processing units shutting down and packaging material availability shrinking rapidly. Imports have fallen by 30%, while domestic production is down 15%, creating extreme price volatility and supply instability.
Industry stocks are depleting fast—initial buffer inventories of one month have already dropped by around 65%, raising concerns of a severe shortage by April if the situation persists. This has begun pushing up retail prices, with packaged drinking water rising from ₹18 to ₹20 per litre, signalling broader inflationary pressure across packaged goods, including milk.
Beyond dairy, the shortage is impacting sectors such as medicines, edible oil, textiles, and automobiles, with polypropylene scarcity also threatening the supply of critical medical items like syringes, IV bags, and blood bags.
Overall, the polymer crunch highlights a critical vulnerability in the dairy value chain—where packaging, not milk supply, could become the next price driver, amplifying cost pressures across everyday consumer staples.
Source: Dairynews7x7 25th March, 2026 Read full story here
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