Soaring oil prices coupled with depreciated shillings have hit the plastic industry in Tanzania where plastic products are likely to sell at 70 percent more than their usual prices.

Plastics are produced using mainly petrochemicals which are derived from crude oil that reached an unprecedented price level of 70 US dollars a barrel on the international market.

Harpreet Duggal, secretary-general of the Plastic Manufactures Association of Tanzania, told local media that prices of high- density polythene, the industry's main raw material, went up from 980 dollars per ton to 1,140 dollars a ton at the end of last month.

Duggal predicted that the prices of high-density polythene could reach as high as 1,225 dollars per ton by the end of this month.

"Companies are now left with two alternatives of either to improve efficiency or close down," said Duggal.

The plastic industry in Tanzania directly employs 3,000 workers and holds some 10,000 others in indirect jobs.

The depreciation of Tanzania shillings against major currencies has added insult to injury to the plastic industry.

The shillings are now trading at 1,140 per dollar as against 1, 032 shillings for a dollar in January this year.

The Bank of Tanzania had to intervene in the foreign exchange market last week by pumping 2.75 million dollars to rescue and strengthen the shillings from further depreciation and to cushion the upsurge in volatile market demands.

Source: Xinhua