Japan is experiencing its most severe banana supply shortage in nearly 50 years, driven by an ethylene supply crisis linked to Middle East oil disruptions. Farmind, a fruit company handling approximately 30% of Japan's imported bananas, warned that related costs have surged nearly tenfold and stated that if the situation persists, bananas may disappear from Japanese dining tables, according to a June 2 report by Singapore's Lianhe Zaobao. The crisis stems from Japan's heavy reliance on the Middle East for approximately 80% of its naphtha supply, a key petroleum derivative used to produce ethylene—the gas essential for ripening bananas. Hormuz Strait shipping disruptions have caused a near-total halt in Middle East naphtha exports to Asia, according to the report. Bananas are the highest-consumption fruit in Japan and are typically imported in a green state, requiring ethylene gas treatment before retail sale. Farmind stated that its ethylene inventory is gradually decreasing and the company is actively seeking new domestic and overseas supply sources.
Naphtha Supply Disruption Triggers Ethylene Production Decline
Japan's naphtha supply depends on approximately 80% of imports from the Middle East, according to Kyodo News data cited in the report. Naphtha is a critical petroleum refining derivative that undergoes cracking to produce ethylene, propylene, butadiene, and other base chemical raw materials. Ethylene is widely used in coatings, food packaging, medical consumables, and construction materials, in addition to its role in banana ripening. Hormuz Strait shipping obstacles led to a near-complete interruption of Middle East naphtha exports to Asia, causing Japan's ethylene supply to tighten sharply. In April, Japan's ethylene production totaled 283,500 tons, down 37.1% year-over-year, according to data from the Japan Petrochemical Industry Association. The ethylene utilization rate fell to 67.3%, the lowest level since comparable data became available in 1996, per the same source.
Naphtha and Ethylene Prices Surge Amid Supply Crunch
Supply shortages combined with soaring logistics costs drove sustained price increases for naphtha and ethylene. In April, Japan's naphtha prices rose 83.2% month-over-month and 79.4% year-over-year, according to Bank of Japan data. Asia ethylene CFR Northeast Asia prices climbed from approximately $800 per ton in late February to $1,450 per ton in mid-April, an increase exceeding 80%, according to Asian petrochemical market data cited in the report.
Food Packaging Industry Adopts Cost-Cutting Measures
The impact of tightening ethylene supply is spreading to multiple downstream industries beyond bananas. On June 1, Japanese snack giant Calbee's shrimp crackers in black-and-white packaging appeared on Tokyo supermarket shelves. The company launched black-and-white monochrome packaging for 14 major products in late May, including its flagship potato chip and cereal lines. Calbee stated the move responds to uncertainty in naphtha supply caused by Middle East conflicts. Naphtha is commonly used as a raw material for plastic production and as a solvent in printing inks, and its supply crisis is spreading throughout Japan's food industry, according to the company. Japanese convenience store chain giant FamilyMart also stated it will gradually change the colored logos on sandwich and other private-brand product packaging to black-and-white designs to reduce reliance on printing inks.
Widespread Food Price Increases Planned for June and July
Petrochemical supply pressures are accelerating transmission to end consumers. According to a survey by Japan's Teikoku Databank, 1,078 food items are planned for price increases in June, a sharp rise from 84 items in May. The number of food items planned for price increases in July has climbed to 2,269. Japan may experience another wave of food price hikes, the report stated. Broader industry impacts continue. A late April survey by the Japan Business Federation (Keidanren) showed that among over 100 surveyed companies, 44% have already felt the impact of naphtha shortages, and approximately three-quarters of companies indicated that if supply problems persist, production will be affected within three months. Despite the market writing "out of oil" on packaging, the Japanese government stated that current naphtha inventory can meet domestic demand until 2027.
FAQ
What caused Japan's banana supply shortage in June?
Japan's banana supply shortage stems from an ethylene supply crisis triggered by Middle East oil disruptions that halted naphtha exports through the Hormuz Strait. Japan depends on the Middle East for approximately 80% of its naphtha supply, which is used to produce ethylene gas essential for ripening imported bananas. Farmind, handling about 30% of Japan's banana imports, warned that related costs surged nearly tenfold and bananas may disappear from Japanese tables if the situation persists.
How much did Japan's ethylene production decline in April?
In April, Japan's ethylene production totaled 283,500 tons, down 37.1% year-over-year, according to the Japan Petrochemical Industry Association. The ethylene utilization rate fell to 67.3%, the lowest level since comparable data became available in 1996. This decline resulted from the near-complete interruption of Middle East naphtha exports to Asia due to Hormuz Strait shipping obstacles.
Why did Calbee switch to black-and-white packaging in late May?
Calbee launched black-and-white monochrome packaging for 14 major products in late May to respond to uncertainty in naphtha supply caused by Middle East conflicts. Naphtha is used as a raw material for plastic production and as a solvent in printing inks. The company's shrimp crackers in the new packaging appeared on Tokyo supermarket shelves on June 1.
