Iran war shocks supply chains, pushes up costs for Turkish industry

Gamze Bal-ISTANBUL  

Industries worldwide have been hit by supply-side shocks after the Iran war disrupted global supply chains, with Turkish manufacturers facing rising cost pressures as a result.

War-related disruptions in industrial inputs have driven up production costs in Türkiye, particularly in sectors reliant on imported raw materials. According to industry representatives, a surge in oil prices pushed costs in the plastics and packaging sectors up by 60 percent in the first month of the conflict. As increases later exceeded 90 percent, consumers faced price rises of more than 30 percent in the packaging of everyday goods.

The impact of the Strait of Hormuz crisis has also been felt in agriculture, with disruptions in fertilizer supply driving up domestic fruit and vegetable prices by 20 percent to 30 percent.

Esat Hisarcıklılar, head of the OSTIM Industrialists and Businesspeople Association (OSİAD), said prices of many commodities doubled within just 10 to 15 days at the height of the crisis before becoming scarce.
“Türkiye is the second-largest plastics producer in Europe and a significant exporter,” he said. “During this period, many companies had to halt production due to difficulties in sourcing raw materials,” he added.

He noted that shortages in plastic inputs have affected multiple downstream sectors, including food, healthcare and automotive, adding that companies are now trying to secure imports from Iran and Gulf countries through alternative routes.

Süleyman Ekinci, head of the Central Anatolian Federation of Industrialists and Businesspeople Associations (İÇASİFED), said the conflict has significantly affected Turkish manufacturers, particularly in fertilizers, plastic packaging and metals.

He said aluminum prices have risen by 30 percent, while freight costs increased by 50 percent to 60 percent. As Türkiye relies heavily on imported raw materials, input costs were already elevated before the war, he added, but have climbed further with rising prices for oil-linked products.

“Disruptions in fertilizer supply pushed up fresh fruit and vegetable prices domestically by between 20 percent and 30 percent,” Ekinci said. “Packaging, cardboard production and glass products have all seen price increases linked to the war,” he added.

Companies have initially drawn down existing inventories and many have shifted focus to the domestic market, which has delayed the full pass-through of higher costs to end products, he said, adding that the impact is expected to become more visible in the coming months.

Ayhan Zeytinoğlu, head of the Kocaeli Chamber of Industry, said the region has not experienced acute shortages of specific commodities, but acknowledged that rising prices have increased overall costs.
He added that exports to Gulf countries were disrupted due to the closure of the Strait of Hormuz, though he described the situation as temporary.

“We may not be able to reflect these cost increases in prices in the short term, but they will be passed on in the medium term,” Zeytinoğlu said.