PLASFED President Ömer Karadeniz stated that the war in the Middle East is directly affecting industrial production through energy prices, logistics expenses, and raw material costs. Karadeniz emphasized that there have been significant increases in energy and raw material costs in a short period. He expressed that if current conditions continue, costs could rise rapidly, which could create new pressure on production costs and consumer prices.
The fluctuation caused by the war in the Middle East in global energy markets has begun to directly affect industrial production in Turkey as well. The rapid rise in oil prices is creating serious cost pressure, especially in sectors based on energy and petrochemical-derived raw materials.
Ömer Karadeniz, Chairman of the Board of the Plastics Industrialists Federation (PLASFED), stated that the war has created not only a geopolitical but also an economic wave, and noted that the increase in energy and raw material costs is directly reflected in production costs. Stating that the rise in oil prices affects many branches of industry, especially the plastics industry, Karadeniz said, “The rapid rise in oil prices directly affects sectors that produce based on petrochemical-derived raw materials, especially the plastics industry. According to our initial assessments, there have been significant increases in energy and raw material costs in a short time. If current conditions continue in this manner, we can foresee that costs could rise rapidly.”
Pointing out that the share of raw materials in production costs is quite high in the plastics sector, Karadeniz reported that this rate varies between 70 percent and 85 percent depending on the type of product. The president of the umbrella organization PLASFED emphasized that for this reason, the increase in energy and raw material prices is seriously straining the cost structure of the industrialist.
“Cost pressure will be reflected in consumer prices”
Stating that industrialists are trying to balance cost increases within themselves as much as possible, Karadeniz noted, however, that if the increases continue for a long time, it will be inevitable for this to be reflected in final product prices.
Karadeniz said, “If this process continues in the same way, price hikes will be inevitable in all products from A to Z, and the consumer will be directly affected by this situation. Cost pressure is expected to increase especially in packaging, cleaning products, logistics, and retail chains. As a result, it seems likely that costs will be reflected in consumer prices and reach more critical levels.”
“Industrialists are facing one of the most difficult periods in recent years”
Reminding that Turkish industrialists have managed to emerge from many global crises to date thanks to their production power and flexibility, Karadeniz stated that current conditions point to one of the most difficult periods for industrialists in recent years.
“The increase in energy and raw material costs, difficulties in accessing finance, and uncertainties in global trade are significantly increasing production costs. Especially in this period, our industrialists need urgent support to access finance, and we expect this support to be provided by the state. Despite this, our industrialists are making a great effort to maintain production, protect exports, and create employment,” said Karadeniz, emphasizing that supporting the production economy is critical for Turkey’s sustainable growth.
“Initial price adjustments may be seen in packaging products”
Reminding that the plastics sector produces intermediate goods for many industries, Karadeniz said that cost increases could be felt faster in some product groups in the first stage.
Karadeniz assessed, “In the initial stage, price adjustments may be seen in plastic packaging products, disposable food packaging, packaging for cleaning and hygiene products, and logistics and transport equipment. The possibility that these price adjustments could rise rapidly if energy prices remain high should not be ignored.”
“Risks may arise on inflation targets”
Stating that the war in the Middle East is driving global energy prices up, Karadeniz said that this could also affect inflation expectations in energy-importing countries like Turkey.
Karadeniz said, “Every increase in oil and natural gas prices directly affects production costs. If the war lasts a long time, it may become difficult to meet year-end inflation targets, and an upward revision may come to the agenda.”
Despite this, drawing attention to Turkey’s strong production infrastructure, Karadeniz stated that the flexibility developed by industrialists during crisis periods is an important advantage, and noted that if a rapid normalization occurs in energy markets, the pressure on both production costs and inflation can be brought under control.
This content has been translated using artificial intelligence technology.