Escalating tension involving the US, Israel and Iran is posing heightened risks to global transportation, trade flows and supply chains, creating mounting challenges for Vietnamese exporters as agricultural shipments gain traction in the Middle East, requiring them to proactively adapt in order to reduce risks and maintain growth.
The Ministry of Industry and Trade’s Export-Import Department forecasts upward pressure on global prices for consumer goods, fuel, and crude oil in the coming time. Such hikes could exert indirect but broad negative effects on Vietnam’s overall production and trade, with particular exposure in exports destined for the Middle East.
Nguyen Tien Dung, Deputy General Director of Simexco DakLak, said the Middle East is a key destination for his company’s two flagship products - coffee and pepper, with sales in the region showing steady growth thanks to long-standing ties with reputable buyers.
However, the conflict inflicted direct costs on trade, with spiking oil prices inflating transportation, logistics, and insurance expenses. Ocean freight rates have climbed steeply, while war-risk insurance surcharges levied by carriers have surged by up to 2,000 USD per container.
Concurrent restrictions on passage through the Red Sea and the Strait of Hormuz have compelled vessels to adopt lengthy reroutes, prolonging transit times and accruing extra charges.
On product exposure, Simexco DakLak’s coffee shipments remain relatively insulated, as Middle East-bound volumes constitute only about 8% of total export revenue. Pepper, by contrast, is more vulnerable, with the region consuming up to 18% of total export volume. Any demand shock could exert near-term downward pressure on pepper prices.
In response to the volatile situation, the company has paused new export orders to the Middle East and several adjacent markets while tracking developments closely. It is also working with buyers to accelerate payment for goods already at ports such as Jebel Ali and Haifa. Outreach to certain Iranian partners has encountered hurdles stemming from telecommunication outages.
For cargoes already dispatched, delivered to ports or en route to transshipment hubs, the company has proactively recalled shipments to wait for more stable conditions before proceeding, aiming to minimise potential losses.
For contracts to other markets under CNF terms (the seller bears freight costs), the company has sought to book vessels promptly to avoid further freight hikes. To secure market access and sustain export momentum, Simexco DakLak plans to pivot toward alternative markets, especially for pepper, which faces great exposure from Middle East disruptions.
Meanwhile, Tran Ngoc Hiep, Director of Thanh Long Hoang Hau Co., Ltd. in Lam Dong province, said dragon fruit shipments scheduled for export to the Middle East have also been put on hold due to rising logistics costs and prolonged transit times that threaten product quality. The challenge is shared by many fruit exporters, especially for those bound for the Middle East or the European Union, which must pass through affected routes and face higher costs and delivery risks.
Le Viet Anh, Secretary General of the Vietnam Pepper and Spice Association, described the Middle East as a promising market for Vietnamese spices. He urged exporters to closely monitor developments and proactively adjust production, logistics and trade plans, while seeking alternative markets with equivalent demand to mitigate potential disruptions affecting Israel, Iran and the wider region.
Dang Phuc Nguyen, Secretary General of the Vietnam Fruit and Vegetables Association (Vina Fruit), noted that during previous periods of instability, freight rates for 40-foot containers had doubled or tripled from baseline levels. War-risk premiums for Gulf-bound vessels are also advancing rapidly.
With numerous carriers diverting around southern Africa to bypass the Suez Canal, Asia-to-Europe transit times have extended by 10–14 days, imposing substantial strain on supply chains, most acutely for perishable agricultural goods.
The department advised exporters and importers to pay close attention to logistics, delivery and insurance terms when negotiating contracts. It recommended embedding force majeure terms, compensation and cost-sharing mechanisms to shield against unforeseen risks. Companies were also encouraged to secure comprehensive cargo insurance to offset prospective losses in destination markets./.
