Crude surge lifts toy prices ahead of summer rush

Summer usually brings a rush of toy shopping as parents look to keep children occupied, but this year, the bill may sting. Prices are climbing as the West Asia conflict drives up crude-linked raw material costs, with several categories already seeing hikes.

Shabbir Gabajiwala, president of The All India Toy Manufacturers Association (TAITMA) told The Times of India that toy prices could increase anywhere between 10% and 40%, depending on the composition of plastics used in the products. For instance, building blocks, children's ride-ons, toy guns, and some variants of toy cars are made entirely of plastic.

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"While some manufacturers have effected price increases, others are in the pipeline. The reason is that the cost of plastics has spiralled by 70%, from Rs 100 per kg to Rs 170 per kg over the past month. Though the recent US-Iran war ceasefire has helped marginally ease prices, bringing them down to Rs 150 per kg, we are not sure when prices will return to previous levels, impacting our production costs," he said.

The ongoing conflict is already pushing up costs for the toy industry, mainly through raw materials. The biggest strain is from plastic resins tied to crude oil, with inputs such as ABS, polypropylene, PVC, polyethylene and packaging becoming more expensive, industry players said.

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Leading toy manufacturer Funskool India said plastics and packaging form a significant portion of manufacturing costs. "The most impacted inputs are plastic resins such as ABS and PP, which have seen increases in the range of 40% to 60% over the past month. In addition, there has been a rise in the cost of masterbatches and additives, packaging materials, and freight.

The sharp increase in input costs is beginning to put pressure on margins. If current trends persist, a price increase may become necessary. Toy prices could rise by 5% to 10%, depending on the product category and the extent to which manufacturers are able to absorb costs. In the near term, companies may absorb part of the increase, but sustained cost pressures will eventually need to be passed on to consumers," said K A Shabir, CEO, Funskool India.

Gujarat-headquartered Aditi Toys said that apart from ABS, PP, and PVC, electronic components have also seen price increases of around 5%–7%. Its founder, Subhashbhai Balubhai Zala, said the rise is largely driven by global crude oil volatility and supply disruptions, directly impacting manufacturing costs.

"Due to rising input costs, prices have increased by up to 30% in certain categories at Aditi Toys. However, the domestic market has not been significantly impacted, with only a slight slowdown in demand. This indicates that consumers continue to prefer quality and branded products, even at slightly higher prices," he said.

(With inputs from TOI)