Chennai, April 7 : A steep increase in the price of biodegradable bags has begun to impact small businesses across Tamil Nadu, with traders and manufacturers citing global geopolitical tensions and rising input costs as the primary reasons behind the surge.

The recent escalation in tensions between the United States and Iran has pushed up international crude oil prices, indirectly affecting industries that depend on petroleum-linked inputs, including the biodegradable packaging sector.

Despite being marketed as eco-friendly alternatives made from plant-based materials such as cornstarch, PLA (polylactic acid) and PBAT, biodegradable bags still require a portion of crude oil derivatives during manufacturing, making them sensitive to global oil price fluctuations.

â??Nearly 20 to 30 per cent of the raw materials used in biodegradable bags are linked to crude oil derivatives. With global crude prices rising by around 20 to 30 per cent in recent weeks, production costs have increased substantially,â?? said a manufacturer based in Uthukottai.

Industry estimates indicate that the cost of manufacturing one kilogram of biodegradable bags has jumped from approximately Rs 127 to Rs 170. Correspondingly, the market price has risen steeply from around Rs 150 per kg to nearly Rs 250 per kg, placing additional financial pressure on both suppliers and end users.

The impact of the price hike is already visible at the retail level. Small traders, who had gradually shifted to biodegradable alternatives following restrictions on single-use plastics, are now being forced to cut back usage to manage expenses. â??We now provide biodegradable bags only when customers make purchases worth Rs 100 or more. For smaller purchases, we are switching to paper covers,â?? said a shop owner at Parrys Corner in Chennai, reflecting a growing trend among petty retailers.

While biodegradable bags emerged as a sustainable replacement for plastic in recent years, the current cost escalation is threatening their widespread adoption, particularly among small-scale vendors.

Experts caution that unless raw material costs stabilise or policy support is introduced, the shift towards environmentally friendly packaging could face a setback, with businesses reverting to cheaper alternatives despite environmental concerns.

/IANS