As the global supply chain wobbles due to the Iran war, there is an outlook that condom prices could rise by up to 30%.
Goh Miah Kiat, chief executive officer (CEO) of Karex, the world's largest condom maker, said in an interview with Reuters on the 22nd (local time) that if supply chain disruptions from the war persist, condom prices could be raised by at least 20% to 30%.
Karex is a global condom manufacturer headquartered in Malaysia that produces more than 5 billion condoms a year and exports to more than 130 countries. Brands such as ONE, Trustex, Carex, and Pasante belong to Karex.
Goh said that since late February, the blockade of the Strait of Hormuz and other impacts have made it difficult to procure some raw materials needed for condom production. In addition to natural rubber (latex), the main raw material, condoms use petrochemical-based inputs such as silicone oil and ammonia. The war's fallout is disrupting supplies of Middle Eastern raw materials, leading to higher prices.
Goh said, "Since the Iran war began in late February, the expense of every item has increased, from synthetic rubber used in condom manufacturing to nitrile, packaging, aluminum foil, and lubricants like silicone oil." He added, "The situation is very unstable and prices have already gone up," and said, "For now, we have no choice but to pass the expense on to consumers."
Prices of raw materials used in plastic packaging have also risen. According to experts, the war is also hitting supplies of "feedstock," a petroleum byproduct needed to produce plastics and other materials.
Angie Gildea, head of the global oil and gas institutional sector at KPMG, said, "Not only crude oil but also feedstock and petrochemicals are in short supply." Gildea said about 41% of Asia's naphtha is supplied from the Middle East and explained that if access to raw materials becomes more difficult, producing countries will have little choice but to raise prices.
Prices have also risen because global condom inventories have fallen as public procurement volumes declined amid cuts to foreign aid budgets. Goh explained, "Last year, foreign aid budgets, including that of the U.S. Agency for International Development, were sharply reduced, and global condom inventories have also fallen significantly."
Goh also said that along with rising condom manufacturing and packaging expense, logistics delays are occurring. Goh said, "This year, condom demand has increased by about 30%, while supply shortages due to shipping disruptions are getting worse," adding, "Shipping to Europe and the United States used to take about one month, but it now takes about two months."