Plastic Raw Material Prices Rise, Government Prepares Emergency Measures
The government is facing a policy dilemma with no truly comfortable options. The government is beginning to tighten oversight of the surge in plastic raw material prices and several other commodities impacted by global geopolitical escalations, particularly the conflict in the Middle East region. This price increase is seen as potentially pressuring the national industry that still relies on imported supplies.
State Secretary Prasetyo Hadi said the government is now monitoring daily movements in world commodity prices to anticipate ongoing effects on industry and society. The government’s main focus is to prevent global price volatility from turning into prolonged domestic pressure.
“The government continues to monitor all commodities affected by global price increases every day,” Prasetyo said during a statement at the Presidential Palace Complex in Jakarta on Wednesday (8/4).
According to him, the plastic industry is one of the most vulnerable sectors because its raw materials still largely depend on imports. When energy and world commodity prices surge, domestic production costs are also pushed higher.
To dampen the impact, the government is intensifying cross-ministerial coordination. Several ministries involved include the Coordinating Ministry for Economic Affairs, the Ministry of Trade, and the Ministry of Industry to formulate quick and integrated responses.
In addition, the government is also preparing measures to maintain the stability of energy and industrial raw material supplies. Options to open new supply sources are also being considered if global price pressures persist.
However, Prasetyo emphasised that solutions to this issue cannot be implemented instantly. This is because adjusting raw material and energy supplies heavily depends on global supply chains and international trade relations, which take time.
He exemplified that efforts to find new oil suppliers are not as simple as choosing a producer country. According to him, although there are many countries or companies with production capacity, the government and industry players still need adaptation processes, negotiations, and adjustments to purchasing schemes.
Therefore, the government is currently opting for gradual mitigation while continuing to develop various policy schemes to maintain price stability. Such steps are deemed important to prevent the national industry from being further hit by ongoing geopolitical uncertainties.