Oil price shocks reach far beyond the pump: into the plastic and synthetic fibres woven through global trade. Yet material substitutes, derived from agricultural residues and renewable biomass, already produced in developing countries, remain constrained by trade rules, standards and market access.
When crude oil prices rose from $69 to $113 per barrel following the military escalation on 28 February 2026, fertilizer prices increased. Less visible is how the same shock hits the supply chains through plastics: as much of what we trade, is wrapped in them.
Plastics, made from fossil fuels, saw their prices rise. As an example, polyethylene resin, which is used in packaging, surged by around 70-80% in European spot markets between February and April 2026, as shown in the graph on the left. The pattern repeats across 25 years of geopolitical tensions and oil shocks, as shown in the graph on the right.
An uneven playing field
The countries absorbing the highest price increases are the same ones producing the materials that could reduce fossil fuel dependency in plastics.
UNCTAD analysis shows tariffs on plastics have fallen to 7.2%, while natural substitutes (e.g., seaweed, pineapple and banana fibre) face 14.4% tariffs. Developing countries supply most of these materials but capture a limited share of these value chains, constraining deployment at scale.
RedGold and Darsh Industries, a Tanzanian manufacturer using plastic packaging material, is feeling the pressure directly. “Plastic packaging costs have spiked,” said CEO Balasaheb Gavane. “Through the UK-UNCTAD SMEP Programme, we have seen viable alternatives that promote resource efficiency and cleaner production; but without reliable supply, clear standards and competitive pricing, we cannot switch at scale.”
Gaps in national regulations and fragmented international standards, including in frameworks such as the Codex Alimentarius, raise compliance costs and create barriers to trade, particularly for smaller producers.
Seaweed, an emerging bio-based input for packaging and abundant in many coastal developing countries, illustrates this challenge: an UNCTAD study reveals that only 18 of 109 trade measures affecting the sector apply specifically to seaweed, making compliance and scaling more challenging.
Textiles, of which 60% is fossil-based synthetics (e.g., polyester), face similar cost pressures while accounting for around 9% of ocean microplastic pollution. Yet natural fibres offering lower-impact options remain less competitive than synthetics.
In 2023, plant fibre production reached 5.9 million MT, less than 5% of the 124 million MT global fibre market dominated by synthetic fibres. Analysis by Fibral Material Alliance finds that natural fibre substitutes and alternatives are held back by scalability constraints and an uneven regulatory environment rather than lack of growth potential.
Recycling existing synthetic textiles back into fibre through textile-to-textile recycling offers a parallel route to reducing virgin synthetic demand. Yet, of the estimated 92 million tonnes of textile waste generated annually, less than 1% is recycled back into textile fibre.
Although demand for recycled synthetic textiles is increasing, supply chains remain insufficiently structured for efficient textile-to-textile recycling, since bottle-to-fiber recycling continues to be more widely practiced than true fiber-to-fiber recycling. said Dr. Muzzamal Hussain of the National Textile University of Pakistan. “Working with SMEP Programme, we are mapping textile waste flows in Pakistan to bring materials back into production, reducing reliance on virgin synthetics.”
UNCTAD’s work on trade and environment, supports the World Trade Organization’s Dialogue on Plastics Pollution, and the negotiations on a global plastics treaty, helping developing countries build the policy frameworks and productive capacity to equitably compete in this transition.
Maria Durleva
SMEP-UNCTAD Programme Management Officer
Henrique Pacini
SMEP-UNCTAD Programme Technical Advisor
Elzette Henshilwood
Portfolio Manager: Textiles and Tanneries