Pakistan's Lahore high court ruled on 6 August that the manufacturing, sale and use of polyethylene (PE) bags will be banned in Gujranwala and Faisalabad cities in Punjab province.
This is an extension of an existing ban in Lahore enforced in February this year. The cities have been given two weeks to source alternatives to plastic bags. There are discussions to use polypropylene (PP) raffia bags instead, although no firm decision has been made yet. The next court hearing on the ban has been scheduled for 9 September.
The short-term impact of the ban on domestic PE demand will not be severe.
"[The ban] will matter, but not much because there are legal ways to get relief, for the time being," said a local trader.
But PE imports are expected to fall in the long term. The ban is expected to reduce production rates at domestic converters' units, which may in turn result in a drop in PE imports.
Polymer prices in Pakistan have been stable to soft on the back of the Eid-ul-Adha holidays. PP raffia prices have dropped by $25/t to $940-950 cfr Pakistan, while high-density polyethylene film prices dropped by $20/t to $930-940/t cfr Pakistan.
Markets are expected to remain subdued this week with Pakistan celebrating its Independence Day on 14 August.
