WASHINGTON (dpa-AFX) - Rising oil prices linked to the Middle East crisis are driving up the cost of plastics, with impacts spreading across global supply chains.
According to UN trade and development body, UNCTAD, the price of key materials such as polyethylene has surged sharply in recent weeks, reflecting the steep rise in crude oil prices.
When oil prices surge, the impact goes far beyond fuel. It runs through global trade - embedded in plastics, packaging and synthetic fibres that underpin modern supply chains.
Following the outbreak of the Middle East war on February 28, crude oil prices jumped from $69 to $113 per barrel. Fertilizer costs rose quickly. Less visible, but just as significant, was the knock-on effect on plastics.
Price of Polyethylene resin - rigid flexible widely used in packaging, rose by an estimated 70-80 percet in European spot markets. Over the past 25 years, similar oil shocks have repeatedly driven up the cost of fossil fuel-based materials across value chains.
While natural alternatives to plastics exist, including materials derived from seaweed and plant fibres, higher tariffs and regulatory barriers are slowing their adoption and keeping transition costs high, UNCTAD warned.
It added that this imbalance is limiting opportunities for developing countries to scale sustainable alternatives and compete in global markets.
The countries most exposed to these price increases are often the same ones producing viable, natural and environmentally friendly substitutes to plastics.
Natural materials such as seaweed, pineapple and banana fibre - largely sourced in developing economies - offer viable substitutes for fossil fuel-based plastics. Yet they face significantly higher trade barriers.
UNCTAD analysis shows tariffs on plastics have fallen to 7.2 percent, while natural substitutes face average tariffs of 14.4 percent. This imbalance limits the ability of developing countries to scale production and compete globally, while raising the cost of transition.
'Plastic packaging costs have spiked,' said CEO Balasaheb Gavane of a Tanzanian company working with the UK-UNCTAD SMEP Program.
'Alternatives exist, but without reliable supply, clear standards and competitive pricing, switching at scale remains difficult,' he added.
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