Oil shortages have already affected Korean instant noodles.

Ask AI · How will the shortage of naphtha affect the prices of daily goods in South Korea?

According to a report by Bloomberg on March 24, the shortage of crude oil in the Middle East is becoming increasingly severe, and the impact has already reached South Korea's food industry.

Recently, due to the instability of naphtha supply caused by the tense situation in the Middle East, South Korea will implement export control measures on naphtha starting next month and release strategic petroleum reserves. Naphtha is a petroleum derivative and a key component in the production of plastics. About 55% of South Korea's naphtha demand is produced by domestic companies, while about 45% is imported directly.

The report indicates that signs of panic buying are already appearing in South Korea, with more residents hoarding garbage bags out of concern for supply. At a CU convenience store in the Yongsan district of downtown Seoul, multiple sizes of garbage bags are sold out, with restocking delayed at least until Thursday.

The crisis has also spread to South Korea's food industry, as the country's instant noodle giant states that the plastic film for packaging will only last for a few months. Reports indicate that Nongshim currently has about two to three months' worth of supply, while Samyang Foods, the manufacturer of the globally popular “Buldak Bokkeummyeon,” expects to maintain stability for the next one to two months.

The reports point out that both Nongshim and Samyang have warned that a long-term shortage of naphtha will have a significant impact on production and create immense pressure to drive up retail prices.

The director of the Korea Plastics Industry Association stated, “If this happens, it will affect all goods that use plastic bags or polyester fibers, from ramen and pharmaceuticals to clothing and tires; essentially, the entire economy will be paralyzed.” (CCTV Finance APP)