AsemconnectVietnam - The conflicts in the Middle East are putting pressure on costs and logistics, forcing the agricultural sector to proactively develop response scenarios, stabilize production, and diversify export markets. Increased cost and logistics pressure on Vietnamese agriculture

The Ministry of Agriculture and Environment recently reported to the Prime Minister on response scenarios to the evolving conflict in the Middle East. According to the report, the conflict not only increases inflationary pressure but also accelerates the shift in global supply chains and trade, directly impacting production costs, logistics, and market demand.
First, agricultural input costs are significantly affected by fluctuations in energy prices. Rising oil prices lead to increased transportation costs and prices of agricultural supplies, especially fertilizers and fuels used in the production, harvesting, and transportation of agricultural products. With the Mekong Delta entering the winter-spring rice harvest season, cost pressure is further exacerbated. Forecasts indicate that production costs could increase by 3-5%, thereby raising agricultural prices and putting pressure on the consumer price index (CPI).
In terms of input costs, fertilizers are significantly affected. Although Vietnam is basically self-sufficient in urea and phosphate fertilizers, it still depends on imported raw materials for some other types. World fertilizer prices have increased and may continue to rise by 5-15%, directly impacting the domestic market.
Similarly, animal feed prices are trending upwards by about 1.5-2% due to increased costs of imported raw materials and international transportation, while domestic supply remains heavily dependent on external sources. For pesticides, the impact is not yet clear in the short term, but if the conflict persists, increased energy costs could lead to price increases and localized shortages.
In the distribution phase, logistics and export costs are strongly affected. Sea freight costs have increased by 25-35%, and shipping times have been extended by 7-14 days due to ships having to adjust their routes to avoid risky areas, reducing the competitiveness of many goods such as seafood, timber, and agricultural products.
In particular, perishable goods face greater risks. Many seafood businesses are experiencing difficulties in transportation, even temporarily suspending exports to the Middle East. Shipments of fruits and vegetables that have already arrived at ports have to wait for new shipping schedules, prolonging shipping times, increasing preservation costs, and risking quality degradation.
Some sectors with a large proportion of exports to the Middle East, such as cashew nuts and pepper, are facing the risk of stagnation. If the disruption is prolonged, pressure on inventory, cash flow, and domestic raw material procurement prices will increase. At the same time, the disruption of the Red Sea - Suez Canal shipping route will have a ripple effect on exports to Europe and North Africa.
In addition, the conflict also indirectly impacts global market demand. Disruptions to oil shipments through the Strait of Hormuz, a transit route for approximately 20% of the world's oil supply, could lead to a slowdown in economic growth, thereby reducing demand for agricultural products in many markets.
Enhancing resilience against global fluctuations
Although agricultural, forestry, and fisheries exports to the Middle East were estimated to reach over US$1.74 billion in 2025, accounting for only about 2-2.2% of the total export value of the entire sector, indirect risks from energy and logistics costs will broadly affect the competitiveness of Vietnamese agricultural products in many markets.
In 2026, the agriculture and environment sector aims for a growth rate of 3.7-4.0%; the total agricultural, forestry, and fisheries exports are expected to reach US$73-74 billion. Given the unpredictable developments, the management agency has developed three response scenarios corresponding to conflict durations of 1 month, 3 months, and 1 year. Each scenario forecasts a different level of export decline, mainly due to spillover effects to the Middle East, Europe, and North Africa.
Currently, the Ministry of Finance (Statistics Office) is continuing to refine the overall assessment model to specifically quantify the impact on GDP growth in the agricultural sector.
In the context of unpredictable risks, the Ministry of Agriculture and Environment has identified the overarching goal of stabilizing production costs, protecting producers' profits, maintaining supply chains, and enhancing long-term self-reliance.
In the short term, solutions focus on stabilizing the supply of input materials such as fertilizers and fuel; implementing a mechanism for purchasing and stockpiling rice to support the market when prices fall. Simultaneously, a "hotline" will be established to promptly receive and address difficulties from businesses, cooperatives, and farmers.
International logistics risk early warning systems have also been strengthened, helping businesses proactively adjust their transportation plans. Financial solutions such as debt rescheduling, debt restructuring, and support for warehousing and goods preservation are being considered to reduce cash flow pressure.
Market diversification continues to be a strategic direction, focusing on expanding exports to East Asia, South Asia, Africa, and Latin America, while effectively utilizing FTAs to increase market share. In addition, credit and tax policies are being reviewed and adjusted to support businesses in reducing costs and maintaining production.
In the long term, the agricultural sector focuses on enhancing self-reliance through restructuring production, promoting digital transformation, applying science and technology, and increasing product value. Simultaneously, negotiations to open markets and expand official exports to major markets such as China, the United States, the EU, Japan, and South Korea will be intensified. Strict quality control, traceability, and branding of "Vietnamese agricultural products" are being implemented.
In the domestic market, solutions to promote domestic consumption, develop e-commerce, stabilize prices, and ensure food safety are also being implemented synchronously.
CK
Source: VITIC/congthuong.vn