Nearly every American consumer staple, from fresh produce and baked goods to household supplies and medical equipment, has been packed at some point in lightweight, flexible plastic sacks, known in the industry as poly bags.
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Elevated gas prices have already given U.S. consumers a sense of how the U.S.-Israeli war with Iran can impact their wallets when crude oil prices increase.
But the downstream cost increases across products further along the supply chain are only beginning to be calculated.
The price of polyethylene, a synthetic resin derived from petroleum and natural gas and used to make plastic packaging, has soared alongside oil prices.
Last year, the Middle East accounted for around 42% of global exports of polyethylene, according to data from the polymer and chemical analysis firm ITP.
With oil tankers effectively barred for weeks from transiting the critical Strait of Hormuz — the only way to reach the global market — plastic packaging producers have seen their costs skyrocket.
The price of polyethylene pellets, known as resin, has nearly doubled since the United States and Israel launched the war, and was up 30 cents per pound at the start of April.
Two American plastic manufacturers told NBC News the tenuous U.S.-Iran two-week ceasefire agreement came too little, too late to slow down the incoming price hikes.
“Maybe late summer, you might start to see some price relief,” said Kevin Kelly, the CEO of Emerald Packaging, a California based company that produces millions of plastic bags each year.
Kelly typically prices out products for his buyers months in advance. But because of how quickly resin prices are now changing, he can no longer promise his buyers a set price for an extended period of time.
“April is baked in, May is baked in, June is probably baked in so that means the first relief you might see is in July or August,” he said.
Emerald Packaging has already passed along an 8% price increase to its customers, which include major produce companies such as Taylor Farms and Dole. Kelly says this is the single largest monthly increase in operating costs he’s seen in his 30-year career.
“I’m stunned at the position we’re finding ourselves in,” he said.
The price of a pound of polyethylene in February was 45 cents, Kelly said. In April, it was up to 95 cents. By May, it could be as much as $1.10.
If these estimates pan out, Kelly anticipates that he’ll have to increase his prices another 15%-20% “almost immediately,” because his profit margins aren’t high enough to absorb the costs, even if they’re only temporary.
“The consumer will end up paying the price,” he said. “All these cost increases will get passed through because no company can absorb them and there’s only one place for them to…
Read More: The Iran war’s next hidden cost: Higher prices for plastic
