Raw Materials · Supply Chain
The Iran conflict’s most direct impact on the woven sacks industry is not the oil price headline. It is what is happening to polypropylene resin supply — and the speed at which available spot material is disappearing from the market. While financial markets focus on Brent crude, packaging manufacturers are watching something far more immediate: the withdrawal of PP raffia quotations by Gulf producers, force majeure declarations from major regional exporters, and a sharp upward repricing of every alternative origin. This is the real supply crisis — and it is already affecting lead times, pricing validity, and procurement strategy for packaging buyers across East Africa.
Why PP Resin Is in the Eye of the Storm
Polypropylene is a petrochemical — its feedstock is propylene, which is derived from naphtha, which is in turn derived from crude oil. The Gulf — principally Saudi Arabia, the UAE, Kuwait, and Qatar — accounts for approximately 35–40% of global PP exports. With the Strait of Hormuz effectively closed to commercial tanker traffic, those export volumes have been severely disrupted. Producers are accumulating inventory they cannot ship; some have cut production to avoid storage filling; others are directing limited export volumes to contracted buyers only, suspending spot quotations entirely. For packaging manufacturers who rely on spot or short-term contract purchases, the immediate impact is a dramatic narrowing of available supply.
The Price Cascade — What the Market Data Shows
When Gulf supply disappears, buyers pivot to India, China, and SE Asia. That collective pivot is now happening globally and simultaneously, driving up prices in every alternative origin market. According to ChemOrbis and ICIS data compiled in the week of 3–10 March 2026, price movements across key origins are running as follows:
| Origin / Product | Price Move | Supply Status | Risk |
|---|---|---|---|
| Gulf PP Raffia (origin) | ▲ +$150–200/ton est. | Offers suspended / FM declared | Critical |
| India PP Raffia (CFR EA) | ▲ +$80–120/ton | Available — ext. lead time | High |
| China / SE Asia PP (CFR EA) | ▲ +$50–80/ton | Available — Cape route +14 days | Moderate |
| Freight surcharge (Cape) | ▲ +$100–150/container | Active — +10–14 day transit | High |
| KES/USD rate | → Stable ~129.2 | CBK intervention active | Low (current) |
The Second-Order Effects Most Buyers Are Missing
Beyond the immediate price move, there are three second-order effects that will shape the PP market over the next 60–120 days — and they are not yet fully priced in.
With tanker transit blocked, Gulf producers cannot export. Storage tanks are filling. Several major producers have already begun reducing run rates to prevent storage overflow. When the Strait reopens, they will not be able to immediately restore full export volumes — cranes, tanker berths, and logistics all need to reconnect. The supply recovery will lag the oil price recovery by weeks, possibly months.
Buyers who panic-bought at peak pricing are placing multiple orders across multiple suppliers simultaneously. This inflates apparent demand, causes producers to prioritise those buyers, and then generates a secondary crunch when orders are cancelled or reduced. The market correction, when it comes, will be sharper because of this artificial demand layer sitting on top of genuine needs.
Under normal market conditions, a supplier quotes with 30-day price validity. Today, many regional suppliers are quoting with validity of 3–7 days — or “subject to reconfirmation.” This means a quotation you received last week may no longer hold. If you are planning production based on a price quote older than 10 days, reconfirm before committing.
Our 10+ years of direct Gulf producer relationships means we are on allocation priority lists — not scrambling in the spot market. We have activated multi-origin sourcing across India and SE Asia as a contingency layer. Our safety stock position is above minimum operational thresholds. Committed orders are protected. For spot or new requirements, contact us early — our available position will narrow before it widens.
Even with oil prices retreating on Trump’s de-escalation signals, physical PP supply will not normalise as quickly as crude pricing. Expect 6–10 weeks of continued tightness in available spot resin, with pricing settling above pre-crisis levels. The buyers who locked in committed supply before the crisis escalated will finish Q2 in a materially better position than those who waited.
Secure Your Q2 Raw Material Position
Talk to us about your forward requirements before the window closes. We are monitoring PP resin availability and pricing daily.
Sources:
ChemOrbis, “PP prices continue to rise as Middle East conflict disrupts supply” (March 2026); ICIS, “How the US-Iran war is reshaping polymers trade routes” (9 March 2026); Plastics News, “Middle East conflict affecting PE, PP markets” (March 2026); Argus Media, “Middle East conflict threatens UAE polymer export port” (1 March 2026); S&P Global / Platts, “War in the Middle East cools polymer trade in the Americas” (3 March 2026).