The surge in oil prices caused by the Middle East conflict will drive up the cost of plastic products, construction materials and even household goods such as toilet paper in Hong Kong, according to business leaders.
They also warned on Monday that some local exporters and manufacturers faced a cash-flow squeeze as overseas buyers opted for short-term orders amid the uncertainties.
Executive Council member Jeffrey Lam Kin-fung, a former business sector lawmaker, said the tensions in the Middle East had significantly driven up fuel costs and hit local firms’ operating expenses through increased air and sea freight charges.
He highlighted a major risk to the plastics industry, noting the region supplied about 85 per cent of the world’s polythene, a critical petrochemical raw material.
“It affects toys, electronics, certain plastic products and even garments,” he said. “With the soaring material prices, the increased freight charges and high oil prices, there is no other way [but to] pay a higher price to buy them, so people are just buying less for now.”
Lam added that buyers from Europe, the United States and other regions were shifting from long-term to short-term orders due to the prevailing uncertainty, affecting the cash flow of exporters and manufacturers.
