Surging plastic prices from Middle East conflict squeeze Indonesian street hawkers and small-scale vendors

Plastic prices in Indonesia have surged up to 100% due to the Iran war, forcing street hawkers to raise prices and cut portions as supply chains falter.

By: AXL Media

Published: Apr 11, 2026, 5:39 AM EDT

Source: Information for this report was sourced from The Straits Times

The Economic Toll of Global Supply Disruptions

The conflict in the Middle East has sent a significant shockwave through Indonesia's informal economy, specifically targeting the essential materials used by street hawkers. Since February 2026, the price of plastic products has skyrocketed, with increases ranging from 40 percent to 100 percent. These surges are a direct result of global supply chain instabilities caused by the war involving the United States, Israel, and Iran. For micro and small enterprises that rely heavily on daily inventory, these rising overheads have created an immediate and severe liquidity crisis.

Micro-Enterprises Facing Difficult Operational Choices

Small-scale vendors and street hawkers are currently operating in an environment of diminishing returns, as the cost of basic packaging has become a primary business hurdle. To mitigate the impact of the price hikes, many business owners are being forced to adopt drastic measures, such as raising the retail prices of their goods or shrinking portion sizes. For those who fear losing their customer base to more affordable competitors, the only remaining option is to absorb the increased costs themselves, leading to significantly thinner profit margins that threaten their long-term viability.

Targeting Essential Packaging for Small Vendors

The price surge has specifically impacted the most common items used in the Indonesian food and beverage sector, including plastic bags, packaging cups, and disposable boxes. Because these items are indispensable for take-away services and street-side consumption, small vendors have little room to negotiate or switch to alternative materials. The suddenness of the increase, which has nearly doubled the cost of some items in just two months, has left many micro-entrepreneurs without the necessary capital to replenish their stocks at current market rates.