As military tensions between the United States and Iran escalate, the food industry faces urgent cost management challenges. With raw material prices already inadequately reflected in product pricing, uncertainties surrounding international oil prices and shipping costs are expected to heighten price increase pressures in the second half of the year.
According to industry sources, the conflict between the U.S. and Iran has intensified, raising tensions in the Hormuz Strait, a critical route for global oil transport. On July 12, the Iranian Revolutionary Guard Corps (IRGC) declared a blockade of the Strait, while the U.S. resumed airstrikes on Iranian military facilities, further deteriorating the situation in the Middle East.
The Hormuz Strait is a strategic chokepoint through which approximately 27% of the world's maritime oil trade passes. Oil and liquefied natural gas (LNG) from major Middle Eastern producers such as Saudi Arabia, the United Arab Emirates, and Kuwait are transported through this route to Asia and Europe. Industry experts warn that if the blockade becomes a reality or military tensions persist, international oil prices and shipping costs could face renewed upward pressure.
These variables are likely to exacerbate already accumulated cost burdens. According to the Ministry of Agriculture, Food and Rural Affairs and the Korea Agro-Fisheries & Food Trade Corporation (aT), the raw material purchase price index rose to 133.9 in the second quarter of 2026, up 13.4 points from the previous quarter's 120.5. In contrast, the shipping price index only increased by 2.5 points to 103.8 during the same period, indicating that companies are absorbing a significant portion of the rising raw material costs.
Industry analysts believe that worsening international conditions could further increase these burdens. In the same survey, 63.9% of respondents cited 'fluctuations in international economy such as prices, interest rates, and exchange rates' as the primary factor for rising raw material prices, while 32.2% identified 'economic instability due to deteriorating international conditions' as a key factor affecting economic downturn.
The food manufacturing sector is particularly sensitive to oil price fluctuations. Packaging materials such as PET bottles and food packaging films are produced from naphtha, a petrochemical raw material, and energy costs for manufacturing processes and product transportation are closely linked to international oil prices. When oil prices rise, costs for packaging materials, logistics, and factory operations increase simultaneously.
Different sectors are facing significant pressures. The beverage industry is monitoring fluctuations in packaging material prices, while the ramen sector is keeping an eye on potential increases in the prices of imported palm oil and soybean oil, as well as packaging costs. The supply of packaging raw materials has not yet fully normalized. According to the Korea Food Industry Association, naphtha supply, which had dropped to 70% of normal levels due to the Middle East conflict, has recently recovered to about 90%. However, if the current situation persists, there are concerns that the recovery trend may slow down again.
Some companies have already begun to reflect cost burdens in their prices. Lotte Chilsung Beverage raised the average shipping prices of 44 items across 12 brands, including Chilsung Cider and Pepsi, by 5.3% starting June 26. Ottogi also plans to increase the shipping prices of 29 items, including curry, glass noodles, ketchup, and pepper, starting July 16, with increases of 6.1% for curry and ketchup, 10% for glass noodles, and 17% for pepper.
Industry insiders note that since oil prices and exchange rates typically take time to be reflected in manufacturing costs, if the Middle East risks persist, the burden may continue into the second half of this year and even into next year. A food industry representative stated, "While there are no immediate supply disruptions, if oil prices and shipping costs rise again due to international conditions, the costs for packaging materials, logistics, and imported raw materials could be affected in a chain reaction. Companies with accumulated cost burdens will find it increasingly difficult to respond to these challenges."
* This article has been translated by AI.
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