JAKARTA - The Iran conflict is starting to be felt in the industrial kitchen. The United States is now the largest supplier of naphtha to South Korea, displacing previously dominant Middle Eastern countries, as reported by Kyodo News, Thursday, April 30.
Data from the South Korean Ministry of Trade, Industry, and Resources recorded imports of naphtha from the US at 24.7 percent. India followed with 23.2 percent, then Algeria 14.5 percent, the United Arab Emirates 10.2 percent, and Greece 4.5 percent.
In fact, before the US-Iran conflict erupted in late February, the US position was still in seventh place. At that time, the United Arab Emirates was the main supplier, followed by Algeria, Qatar, Kuwait, and India.
"The US is the largest source of imports because its supply is easier to secure," said Deputy Minister of Trade, Industry, and Resource Security of South Korea, Yang Ghi-wuk, quoted by Kyodo News.
Nafta itself is the main raw material for the petrochemical industry. From here, various everyday products are born, ranging from plastics, packaging, to chemicals for industry. This means that changes in the supply of nafta can have a direct impact on the production chain - even the price of goods.
Despite the shift, the South Korean government has not seen this as a permanent change. The market is very sensitive to prices, so the direction of supply can still change.
Seoul estimates that naphtha supplies will stabilize again from next month. Efforts to diversify imports and policy support are beginning to show results.
For May, South Korea is expected to be able to secure up to 90 percent of supplies as before the Iran conflict. Petrochemical companies are also starting to increase plant operations following the entry of new supplies.
"The volume of the naphtha contract throughout March has been achieved in only half a month in April," said Yang.
Apart from the US, South Korea has also increased imports of petrochemical feedstock from China to keep production going.
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