Vietnam’s agricultural exports face growing pressure from Middle East geopolitical tensions

Several of Vietnam’s key agricultural export commodities are being affected by the ongoing conflict in the Middle East, which has disrupted maritime transportation and pushed up shipping costs.

The Middle East tensions are already having noticeable impacts on the prices of several major Vietnamese agricultural products, including pepper.

Before the outbreak of the conflict, pepper prices in Vietnam’s Central Highlands and Southeast regions were trading at nearly VND 150,000 per kilogram. However, following the escalation of the conflict, pepper prices have shown increasing volatility.

Mr. Hoang Phuoc Binh, owner of a large pepper plantation in Chu Se District, Gia Lai Province, said that in recent days, due to the impact of the Middle East situation, pepper prices have been highly volatile, fluctuating frequently between increases and declines. As of March 10, pepper prices were trading at over VND 140,000 per kilogram.

According to market participants, many companies are currently purchasing pepper cautiously or temporarily suspending purchases while monitoring developments in the Middle East. In addition, the sharp increase in fuel prices has become a key factor contributing to the recent price fluctuations.

However, the largest impact of the Middle East conflict on Vietnam’s key agricultural sectors lies in exports, particularly as the conflict has significantly disrupted global logistics networks.

The cashew industry is among the sectors most affected, as the Middle East is a major export market for Vietnamese cashew nuts. According to Bach Khanh Nhut, Vice Chairman of the Vietnam Cashew Association (Vinacas), in 2025 the Middle East ranked among the top three export markets for Vietnamese cashews, following China and the United States.

The conflict has already begun to affect many cashew exporters and the industry as a whole. Numerous shipments of cashew nuts currently en route to the Middle East have been forced to halt at safe locations, as access to several Middle Eastern ports has been blocked or deemed too dangerous due to the conflict.

Some cashew exporters revealed that certain importers in the Middle East, facing supply shortages, have even been willing to pay additional war-risk insurance premiums to shipping companies in order to allow vessels to continue their journey. However, ship owners have refused to take the risk.

Delayed payments caused by force majeure circumstances are also affecting the working capital turnover of cashew exporters.

Exports of cashew kernels to other major markets such as the United States and China are also facing difficulties. With the duration of the Middle East conflict still uncertain, consumers in many markets have become more cautious in their spending. As a result, instead of purchasing large volumes in advance as before, many importers now only buy quantities sufficient to meet immediate sales, leading to declining orders for Vietnamese cashew exporters.

According to Le Viet Anh, Secretary General of the Vietnam Pepper and Spice Association (VPSA), the Middle East is also an important market for Vietnamese pepper, accounting for around 15% of the country’s pepper exports. Therefore, if the conflict in the Middle East continues, it could significantly affect Vietnam’s pepper exports, not only to this region but also to other key markets such as the United States and Europe.

At present, pepper exporters are facing significant logistics challenges. For shipments already in transit to importing countries, shipping lines have imposed additional surcharges, pushing total transportation costs to three to four times higher than previous levels.

Meanwhile, new shipments are struggling to secure transport, as many shipping companies are reluctant to operate routes passing through Middle Eastern waters due to security risks. If the situation persists, it could seriously impact Vietnam’s pepper exports, especially since Europe and the Americas accounted for nearly 47% of Vietnam’s pepper export volume in 2025, and shipments to these regions typically pass through Middle Eastern maritime routes.

For the fruit and vegetable sector, the Middle East accounts for only about 3% of total export turnover, meaning the conflict primarily affects logistics for shipments to the United States and Europe rather than direct market demand.

According to Dang Phuc Nguyen, Secretary General of the Vietnam Fruit and Vegetable Association, many shipping companies are now rerouting vessels via the Cape of Good Hope in South Africa to avoid risks in the Red Sea. This detour has extended transit times by 10–15 days, affecting product shelf life and significantly increasing transportation and storage costs.

In addition, shipping companies are charging additional war-risk insurance premiums, pushing transport costs per container of fruits and vegetables to two to three times higher than before.

Theo THÔNG TIN THỊ TRƯỜNG NÔNG SẢN

Link nguồn: https://thitruongnongsan.gov.vn/vn/tID28124_nong-san-viet-chiu-suc-ep-tu-trung-dong-bai-1-nganh-dieu-anh-huong-nang-ne.html