Middle East crisis triggers 50% price surge in India’s grain packaging as jute, plastic shortages collide

INDIA – India’s agricultural packaging industry faces a cascading crisis as the Middle East conflict has triggered a 50 percent shortfall in plastic and net bags alongside an existing 50 percent shortage of gunny sacks, driving prices up by as much as 55 percent for essential food grain packaging.

The ongoing Middle East crisis has disrupted polymer supply chains, creating a perfect storm for India’s agriculture sector.

According to Avinash Rathi, President of the Grain and Seeds Merchant Association in Kota, jute bags were already scarce, forcing traders to rely on plastic alternatives now also in crisis.

The conflict has disrupted the entire system, leaving farmers, traders, and the government worried about storing produce.

By the Numbers: A 50% Perfect Storm

Jute bag prices have surged from INR 28 to INR 42 per kilogram (approximately US$0.33 to US$0.50), a 50 percent increase.

Plastic bags have skyrocketed from INR 180 to INR 280 per kilogram (approximately US$2.10 to US$3.30), a 55 percent jump.

Net plastic bags for garlic have risen from INR 14 to INR 21 per kilogram (approximately US$0.16 to US$0.25), a 50 percent increase.

Rathi disclosed that a 50 percent shortage of gunny bags was anticipated, and plastic bags could have helped.

But petrochemical shortages have led to plastic bag scarcity just as harvest season approaches.

Supply Chain Disruption

Chitresh Agarwal, who runs a plastic bag manufacturing unit, explained that raw materials are unavailable.

The polymer industry uses petrochemicals derived from crude oil, with plastic granules as a refinery by-product. Refineries are not operating at full capacity due to the Middle East crisis, causing problems down the chain.

Harvest Season Under Threat

Garlic harvest has begun, requiring new net bags for storage and transport. Wheat, mustard, gram, and coriander will follow, all requiring gunny bags or plastic alternatives.

Roop Narayan Yadav of the Bharatiya Kisan Sangh noted that farmers are most affected, as rising costs eat into their margins.

Impact Across the Value Chain

Vinod Jain, a supplier of plastic bags for flour and pulses, noted that with shortages impacting every stage, packaging costs are automatically increasing, suggesting consumers may soon face higher prices for staple foods.

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