Koichi Hagiuda, a deputy secretary-general of the Liberal Democratic Party, said he has identified the vendors responsible for naphtha supply "clogs" [1].
This development highlights the fragility of the petrochemical supply chain, where bottlenecks in transport and vendor shutdowns are driving up costs for small businesses across Japan [1, 2].
Hagiuda warned that simply increasing production to solve the immediate shortage could be counterproductive. He said that if production is increased blindly, it would lead to an oversupply of inventory in the future [1].
The impact of these supply issues is visible in the Yanaka Ginza shopping district of Tokyo. At a local meat shop, owner Shihan Anzai said procurement costs have risen by 20% to 30% [1]. To manage these expenses, the shop has changed how it packages food for customers.
Anzai said that in the past, items like minced meat cutlets were placed in individual bags. Because prices have risen, the shop now cuts larger plastic bags in half vertically to wrap single items [1].
Despite the rising costs and the official focus on supply "clogs," some business owners do not perceive a total shortage of the raw material. Anzai said he does not believe naphtha is lacking because it is still available for purchase at stores [1].
The current situation is attributed to a combination of specific vendor shutdowns and transport bottlenecks that have restricted the flow of naphtha, a critical feedstock for plastics and chemicals [1, 2].
“"If production is increased blindly, it would lead to an oversupply of inventory in the future."”
The tension between Hagiuda's warning and the immediate needs of small businesses illustrates the difficulty of managing commodity volatility. While the government seeks to prevent a future market glut by resisting rapid production spikes, the immediate reality for retailers is a surge in overhead costs that forces inefficient, manual cost-cutting measures to maintain profit margins.
