Chennai, April 7: The recent spike in crude oil prices is causing significant challenges for traders in Tamil Nadu. This increase has led to a substantial rise in the cost of biodegradable bags. Merchants and manufacturers attribute this surge to global geopolitical tensions and rising input costs.
The recent escalation in tensions between the United States and Iran has driven international crude oil prices higher, indirectly impacting industries reliant on petroleum-based inputs, including the biodegradable packaging sector.
Although biodegradable bags are marketed as eco-friendly alternatives made from plant-based materials like cornstarch, PLA (polylactic acid), and PBAT, their production still requires certain components derived from crude oil. This dependency makes them sensitive to fluctuations in global oil prices.
A manufacturer based in Uthukottai stated, “About 20 to 30 percent of the raw materials used in biodegradable bags are linked to petroleum products. The recent 20 to 30 percent increase in global crude oil prices has significantly raised production costs.”
Industry estimates indicate that the cost of producing one kilogram of biodegradable bags has risen from approximately ₹127 to ₹170. Consequently, the market price has surged from around ₹150 per kilogram to nearly ₹250 per kilogram, placing additional financial pressure on both suppliers and end-users.
The impact of this price increase is already visible at the retail level. Small traders, who were gradually shifting towards biodegradable options following the ban on single-use plastics, are now compelled to reduce their usage to manage costs.
A shop owner in Paris Corner, Chennai, remarked, “We now provide biodegradable bags only for purchases of ₹100 or more. For smaller purchases, we are using paper covers.” This trend reflects a growing shift among small retailers.
Despite biodegradable bags emerging as a sustainable alternative to plastic in recent years, the current rise in costs threatens their widespread adoption, particularly among small-scale vendors.
Experts believe that unless raw material costs stabilize or policy support is provided, the transition to eco-friendly packaging may face significant setbacks.
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