Japan's Food and Beverage Prices Set to Rise Amid Naphtha Shortage

Japan's food and beverage prices are expected to increase as early as this summer due to a shortage of naphtha, a key raw material for plastic packaging, according to a report by Teikoku Databank. The ongoing disruption of energy flows through the Strait of Hormuz has reduced the supply of naphtha, prompting suppliers of polypropylene and polyethylene packaging to demand immediate price hikes. Small and medium-sized food manufacturers have already begun to feel the impact. According to Jin10, the report released on Thursday covers food and beverage categories that have already experienced or are expected to experience price increases by September, with confectionery products, including chocolate, anticipated to be most affected. In March, Japan's core consumer prices, excluding fresh food, rose by 1.8% year-on-year, surpassing economists' median expectations and the previous month's 1.6% increase. The index excluding fresh food and energy, considered an important measure of underlying inflation by the Bank of Japan, rose by 2.4%, remaining above the 2% target.