Calbee drops color from 14 snacks as oil crisis bites

The closure of the Strait of Hormuz is creating a critical shortage of naphtha, a key petrochemical, forcing Japanese consumer goods companies like Calbee to make drastic production changes as supply chain disruptions ripple across Asia. The snack maker announced Tuesday it would switch 14 products, including its popular potato chips and Frugra cereal, to monochrome packaging to conserve colored inks derived from the scarce material.

“The stability of plastic as a basic industrial material has been shaken,” says Chen Ping-Kuo, a professor in industrial engineering and management at Japan’s Ritsumeikan Asia Pacific University. He notes that as Asian societies depend heavily on plastic, the disruption will “move quickly through supply chains”.

The financial and material impact is spreading. Japan typically imports about 40 percent of its naphtha from the Middle East, and the war has choked off a significant portion of that supply. The shortage has caused prices for some plastic goods in Taiwan to surge as much as 40 percent, according to the Straits Times. The global shipping industry is facing daily costs of nearly $400 million from the disruption, according to the European Federation for Transport and Environment.

This disruption threatens to cascade through Asian economies, impacting everything from food packaging to critical healthcare supplies and forcing a long-term supply chain rethink. Much as the COVID pandemic pushed firms to adopt a “China plus one” strategy, experts suggest the current crisis may lead to a “Middle East plus one” approach to de-risk supply chains from the Hormuz chokepoint.

From Ink to Syringes

While Calbee’s move to black-and-white packaging is the most visible sign of the shortage, the crisis runs much deeper. The company’s decision affects well-known products whose colorful bags, from the orange and blue of its lightly salted chips to the yellow and green of its seaweed flavor, are a familiar sight to Japanese consumers.

The same petrochemicals are essential for healthcare. In South Korea, health regulators have launched probes into the hoarding of medical consumables like syringes and gloves. “Hospitals and clinics are preemptively ordering extra stock in anticipation of price hikes, which is creating artificial bottlenecks,” said Jung Chul-woo, a representative from the Korea Medical Devices Association. The shortage of polypropylene and PVC limits the availability of syringes, IV bags, and sterile packaging, creating a public health risk in countries like India, Indonesia, and the Philippines.

A Widening Energy Shock

The naphtha shortage is one facet of a broader energy crisis squeezing the global maritime industry. Ship operators rely on bunker fuel, a heavy oil derivative, to power the vessels that move 80 percent of global trade. With the Strait of Hormuz virtually closed, the world’s largest refueling hub in Singapore is seeing reserves dwindle and prices spike.

Before the war began on February 28, bunker fuel in Singapore cost about $500 per metric ton. As of early May, that price had surged over 60 percent to more than $800 per metric ton. While shipping companies are currently absorbing these costs, they may soon “pass on to the customers,” said June Goh, an oil analyst for market intelligence firm Sparta Commodities.

Iran Defends Hormuz Closure

Iran has defended its closure of the strait, which handles over 20 percent of the world's oil supply. Foreign Ministry spokesperson Esmaeil Baghaei said Tehran was “forced” to act after what he called unlawful attacks by the United States and Israel. In an interview with India Today, Baghaei argued the disruption was triggered by Washington and Tel Aviv, not Tehran.

“We are not happy about what is happening in India and other countries, but this was caused by the United States and Israel,” Baghaei said, expressing regret for the impact on partners like India. He confirmed that Iran's Foreign Minister plans to attend the upcoming BRICS meeting in Delhi, where the issue will likely be a major topic of discussion.

This article is for informational purposes only and does not constitute investment advice.