New Zealand's plastics sector most exposed to Iran war
Sydney (6 May)
New Zealand’s chemical and plastic manufacturers are the producers most exposed to the US-Israeli war in Iran, largely because of petrochemical supply disruptions, estimates from the Reserve Bank of New Zealand (RBNZ) show.
Just under 60% of the sector’s non-labour input costs are directly exposed to the Iran war, RBNZ said in the May edition of its Financial Stability Report on 6 May. Two-thirds of its exposure comes from petrochemical inputs, which often come from the Persian Gulf and pass through the Strait of Hormuz, RBNZ data show.
On 16 April, New Zealand materials producer Fletcher Buildings told investors that it may increase plastics prices by up to 36% because of Iran war-related input cost pressures.
New Zealand’s transport, fishing, and aquaculture sectors are also heavily exposed to the war, largely because of direct fuel and freight costs. New Zealand diesel prices increased from NZ$1.87/litre on 27 February – immediately before the Iran war began – to NZ$3.51/litre on 24 April because of the war, data from the Ministry of Transport show.
New Zealand’s Ministry for Primary Industries (MPI) is exploring options to allow fisheries to carry forward more of their unused annual catch quotas this year than normal to support the sector, according to industry group Seafood New Zealand. Fisheries can generally carry over 10% of their catch quotas each year, according to MPI.
New Zealand’s agricultural producers have some exposure to the Iran war, with 15% of dairy farming inputs and 12% of sheep, beef, and other farming inputs exposed to fertiliser supply chains. But New Zealand fertiliser producer Ballance is confident it will have enough nutrients to support farmers in autumn, it said in early April.
By Avinash Govind