The Iran war's economic shockwaves have now hit condoms.
Karex Bhd., which makes one out of every five condoms worldwide, is preparing to raise its prices by as much as 30% as the continuing conflict destabilizes supply chains and drives up expenses, Chief Executive Officer Goh Miah Kiat said in an interview with Bloomberg News.
The surge in condom costs underscores how the Middle East war, which has already upended energy markets and raised prices for food to fertilizers, is disrupting virtually every aspect of life for consumers.
The Malaysian company churns out about five billion condoms a year for brands such as Durex as well as its own labels, including ONE Condoms and Carex.
The condom price hike will take place within the next few months, Goh said. “We have been in the process of adjusting prices with most of our customers, and this is definitely one of the biggest price adjustments we've done in a very long time,” he said.
Production costs for the world's largest condom maker have climbed by about 25% to 30% since the war started as shortages of oil-derived chemicals and higher raw material prices rippled through the supply chain, Goh said. The disruptions are also pushing up the cost of condom wrappers and lubricants, he said.
ALSO READ: Trump Believes 'Great Deal' With 'Blood Thirsty' Iran Likely, But Keeps Door Open To Bombings
Karex, whose product lineup includes glow-in-the dark and nasi lemak-flavored condoms, has enough raw materials to keep production running for the next two to three months, but beyond that the outlook is cloudy as the continuing supply of key ingredients is uncertain if the war continues, Goh said.
He did not rule out further price increases. “We cannot confirm in the future there will be no longer any more pricing adjustment,” Goh said.
The company relies on a range of petrochemical-linked materials — such as ammonia used to preserve latex, ethanol for packaging and printing, and silicone oil to lubricate each condom, he said. Since the start of the war, the cost of silicone oil has jumped about 30% and nitrile latex prices have doubled, while natural rubber prices have climbed by a third since January.
Finding substitutes isn't straightforward given strict regulatory requirements for medical products such as condoms, Goh said.
Rival producers in regions such as India are grappling with even deeper supply-chain disruptions, Goh said. Furthermore, the pullback of USAID donor support for health agencies to buy condoms has meant organizations are turning to the commercial market, creating more buyers, he said.
For now, higher prices aren't expected to dent demand because the market for condoms is virtually inflation-proof, Goh said.
“In bad times, the need to use condoms is even more because you're uncertain with your future, whether you'd still have a job next year,” he said. “If you have a baby right now, you'll have one more mouth to feed.”
ALSO READ: US-Israel-Iran War Live News Updates: Trump Expects 'Great Deal' From Iran Talks
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
