5 solutions to overcome geopolitical bottlenecks

In the context of escalating conflict in the Middle East, the ripple effects on global supply chains are posing new challenges to Vietnam’s export activities, particularly for agricultural products.

In an interview with a reporter from VAN News, Associate Professor Dr. Nguyen Dinh Tho, Deputy Director of the Institute of Strategy and Policy on Agriculture and Environment (ISPAE), stated that geopolitical fluctuations are forcing export businesses to quickly adjust their strategies.

What are the short-term and medium-term impacts?

In the context of the Middle East conflict disrupting logistics and increasing transportation and input costs, how will Vietnam’s exports of agriculture, forestry, and fishery products be affected in the short and medium term, in your view?

Based on actual developments of the conflict and the current state of supply chains, the impact trends on Vietnam’s agriculture, forestry, and fishery exports show a clear divergence between the short term and the medium term.

In terms of export value and orders, export turnover has not experienced an immediate decline. In fact, in the first two months of 2026, agriculture, forestry, and fishery exports still recorded strong growth, reaching USD 11.3 billion, up 17.1% compared to the same period last year. Most exporters in key sectors have secured orders through July–August 2026, so the volume of goods shipped has been maintained.

Cost risks are the most significant short-term blow. International freight costs have risen by about 20–30% over the past few weeks, while domestic logistics costs have increased by 15–20%. Freight rates on routes from Asia to Dubai have nearly doubled, along with emergency surcharges ranging from USD 1,500 to 4,000 per container.

The sector most immediately affected is seafood, which faces the earliest challenges. Fresh seafood products are at risk of supply disruptions due to restricted airspace and flight schedule disruptions. Meanwhile, shifting to frozen exports also faces obstacles, as shipping lines have limited or temporarily suspended bookings for refrigerated containers, which already carry very high surcharges. In addition, vessels taking detours have increased transit times by 10–14 days, raising concerns among businesses about a repeat of the 2021 empty container shortage.

Global demand is weakening as the conflict threatens to push up freight rates, fuel prices, and global consumer goods prices. If this inflation persists, it will tighten international consumer budgets, leading importers to become more cautious and potentially reduce the volume of new orders toward the end of the year.

The two-way impact also shows that, on the positive side, Gulf countries rely on imports for 80–90% of their food supply and are highly sensitive to supply chain disruptions.

Flexibly adjusting transport methods, proactively diversifying markets

When key maritime routes are disrupted for a prolonged period, what solutions should the agricultural sector adopt to maintain export flows to the Middle East?

In the context of prolonged conflict and disruptions to shipping routes through the Middle East, the agricultural sector and exporting enterprises can implement several short-term solutions to maintain trade flows.

First, flexibly adjust transport methods. For essential agricultural products or fresh goods that are highly time-sensitive, businesses may consider shifting to air transport.

Second, establish strict contract terms and risk prevention measures. The Import-Export Department (Ministry of Industry and Trade) has recommended that businesses, during contract negotiations, pay special attention to terms related to logistics, transportation, and insurance.

Third, take advantage of opportunities from partners’ food security stockpiling programs. Due to their dependence on 80–90% imported food supply, some countries such as the UAE have activated strategic national reserve plans for items such as rice, grains, and cooking oil for the next 4 to 6 months.

Fourth, closely coordinate and update logistics information. Businesses need to proactively monitor and exchange information with regulatory agencies regarding fluctuations in freight rates, war risk surcharges, and port congestion to align response measures, seek alternative multimodal routes, or temporarily redirect exports to markets less affected by the conflict.

Fifth, proactively diversify markets and alternative consumption channels. According to recommendations from the Import-Export Department, given the high risk of exporting goods to the Middle East, businesses need to urgently seek markets with similar demand as alternatives.

Shifting from “volume-based exports” to “value-based exports”

In the long term, how should Vietnam restructure its agricultural markets and supply chains to reduce dependence on geopolitical “chokepoints” like the Middle East, while enhancing resilience to similar shocks?

To reduce dependence on geopolitical “chokepoints” and strengthen the long-term resilience of agricultural supply chains, Vietnam needs to focus on core restructuring strategies.

First, promote deep processing and reduce the share of raw exports. Instead of relying on fresh agricultural exports, which are highly sensitive to transport time and preservation costs, businesses should restructure toward processed products (such as canned, dried, and frozen goods) to better adapt when shipping routes are prolonged.

Second, diversify markets and develop a global Halal ecosystem. In addition to redirecting trade flows back to intra-Asia markets (China, Japan, South Korea, ASEAN) to avoid risks associated with long-distance maritime routes, Vietnam should expand its share of the global Halal market. With the Muslim population projected to reach 2.2 billion by 2030, effectively implementing the project “Strengthening international cooperation to develop Vietnam’s Halal industry by 2030” will enable Vietnamese agricultural products to penetrate a wider range of markets, rather than relying on a few traditional Middle Eastern partners.

Third, achieve input supply chain autonomy through ecological agriculture. To break the “scissors price effect” caused by reliance on imported chemical fertilizers and Gulf-region fuel, Vietnam is accelerating its transition to organic fertilizers.

Fourth, upgrade domestic logistics infrastructure and multimodal transport. Vietnam needs to invest strongly in cold chain logistics systems, such as large-scale automated cold storage, to extend post-harvest preservation time, enabling businesses to better time their exports.

Fifth, accelerate digital transformation, enhance supply chain transparency, and strengthen national branding. The agricultural sector must decisively shift from “volume-based exports” to “value-based exports,” with quality and standards as the core foundation.

At the same time, local authorities and businesses must invest heavily in digital traceability systems to ensure transparent supply chains and meet international certifications (such as GlobalGAP, organic standards, and low-emission standards). Deep digital transformation and active participation in cross-border e-commerce will help Vietnamese agricultural products directly access distribution networks, strengthen their position, and increase valuation in mid- to high-end market segments globally.

Thank you very much!