Agriculture sector develops scenarios to respond to export risks

Agriculture sector develops scenarios to respond to export risks

Global market volatility linked to the Middle East conflict could affect the country’s agricultural production and exports.

Seafood products are among key exports that could see reduced competitiveness due to rising logistics and input costs amid global market volatility. — VNA/VNS Photo

Rising geopolitical tensions in the Middle East are prompting Việt Nam’s agriculture authorities to prepare contingency plans amid concerns that global market volatility could raise production costs, disrupt supply chains and affect consumption demand.

Speaking at the regular press conference of the Ministry of Agriculture and Environment on Wednesday, Trần Gia Long, deputy director general of the Planning and Finance Department, said global market fluctuations linked to the Middle East conflict could affect the country’s agricultural production and exports.

Preliminary assessments suggest that surges in global oil prices may push up input costs for agricultural production.

Energy, transport and production input prices are rising, with urea fertiliser currently priced at between US$540 and $545 per tonne, the highest level since 2025. This could increase agricultural production costs by about 3–5 per cent.

Logistics costs may also climb as maritime freight rates rise by 25–35 per cent, while shipping times could extend by seven to 14 days as vessels reroute to avoid conflict zones.

These factors could weaken the competitiveness of key export products such as wood products, seafood and processed agricultural goods, making contingency planning necessary to minimise potential risks to export activities, Long said.

Geopolitical tensions could also indirectly affect global demand if economic growth slows, reducing demand for agricultural imports, he added.

Việt Nam’s agricultural, forestry and fishery exports to the Middle East totalled about $1.74 billion last year,

If the conflict lasts about one month, Việt Nam’s agricultural export turnover could fall by around $1 billion, Long said.

If it lasts three months, losses could reach $3–3.5 billion. Exports to the Middle East could decline by $500–600 million, exports to Europe by $1.5–1.6 billion and exports to North Africa by $200–250 million.

In a scenario where the conflict continues throughout the year, exports to the Middle East could be disrupted while shipments to Europe and North Africa could drop by up to 50 per cent.

Long said the scenarios were still being reviewed and assessed to help advise the Government and the Prime Minister on appropriate policy responses, including restructuring export markets and supporting businesses in coping with global market volatility.

Amid continued uncertainty in global markets and the risk of renewed supply chain disruptions, the agriculture sector will continue implementing comprehensive solutions under the Government’s action programme to ensure growth targets, he said.

Deputy Minister Phùng Đức Tiến said this year is expected to present more challenges than the previous year.

Global geopolitical developments, particularly the conflict in the Middle East, could affect the prices of fuel, fertilisers and other agricultural inputs.

According to the deputy minister, the ministry has prepared several response scenarios and policy solutions to proactively cope with global market fluctuations while continuing to restructure the agricultural sector and diversify export markets.

The ministry is also focusing on improving institutions, promoting digital transformation and strengthening quality control for agricultural products, food safety and veterinary hygiene.

In addition, response plans for natural disasters, disease outbreaks, dam and irrigation safety, and forest fire prevention are being implemented to ensure stable production.

The ministry noted that synchronised implementation of solutions related to institutions, science and technology, digital transformation and market expansion would help sustain the sector’s growth momentum and support long-term sustainable development.

According to the ministry, local authorities should closely monitor global market developments, especially those related to the Middle East conflict and tariff policies of the United States, to promptly formulate appropriate response measures and help ensure stable agricultural production and exports in the coming period. 

Bizhub