Karex plans price increases of between 20% and 30%, with the world's biggest condom producer attributing the move to disruption linked to the closure of the Strait of Hormuz. The Strait of Hormuz has effectively been shut for two months and remains subject to a blockade by the US Navy. Prices could climb even higher if the conflict in the Middle East continues and the Strait of Hormuz remains blocked.
Escalating rubber and petrochemical costs are driving significant price pressures across Karex's supply chain. Most condoms are made from latex, a form of rubber produced using petrochemicals linked to Middle East supply chains. Rubber prices have already jumped by 8.5% in the past month, driven by rising oil prices. Costs have increased right across Karex's supply chain.
Packaging materials and lubricants, including silicone oil and aluminium foil, have also become more expensive, according to Goh Miah Kiat. Higher costs for manufacturing and packaging condoms have added to delays in shipping, according to Kiat. Karex's shipments to Europe and the US are now taking close to two months to arrive, twice as long as before the war in Iran.
Prices could climb even higher if the conflict in the Middle East continues and the Strait of Hormuz remains blocked. The Strait of Hormuz closure is expected to heap even more pressure on consumer goods that rely on petrochemicals. The exact timeline for when the price increases will take effect for consumers remains unclear, as does how long the Strait of Hormuz blockade is expected to last and its full impact on global supply chains.
A surge in demand due to US foreign aid cuts is creating additional pressure on Karex's operations. Karex plans to increase output to cope with demand triggered by US government cuts to foreign aid. Donald Trump's administration slashed funding for the US Agency for International Development by 92%, equal to $54bn (£43bn) last year. Demand for condoms has surged by 30% this year, according to Kiat.
Karex sells five billion condoms a year and has enough condoms stockpiled to meet demand over the next few months, according to Kiat. The company's current production scale and inventory position provide some buffer against immediate shortages, though whether other condom manufacturers are facing similar price pressures and planning increases remains unknown.
Potential shortages could emerge because of shipping disruption, according to Kiat. The broader implications for consumer goods that rely on petrochemicals could be significant if the Strait of Hormuz blockade continues. What specific brands or products will be most affected by the price increases has not been specified by Karex, though the company produces condoms for major brands including Durex and Trojan.