Iran war hits Thai rice exports, pushes fishing sector to standstill

The Iran war is not only shaking energy markets, but is also spilling over onto the world’s dinner table.

The closure of the Strait of Hormuz has cut off the route for Thai rice exports, driving up costs and draining orders, while the fishing sector is being hit by soaring fuel prices that are leaving boats tied up at port.

Operators warn that this crisis is worse than COVID-19.

Nikkei Asia reported that Thailand, one of the world’s major rice producers, exported about 1.34 million tonnes of rice to Middle Eastern countries last year, mainly to Iraq and Yemen, equivalent to roughly 17% of the 7.9 million tonnes it shipped worldwide in 2025.

However, exports to those countries began to slow this month because of logistics constraints and higher shipping costs, according to Thai government data.

“In the worst-case scenario, the volume of rice we send to the Middle East each year could almost disappear entirely,” Arada Fuangtong, director-general of the Department of Foreign Trade (DFT) under the Ministry of Commerce, said, adding that rice exports to the region had fallen sharply after the Iran war erupted.

The DFT chief added that orders from major customers in the region were unlikely to recover soon because the closure of the Strait of Hormuz had cut off shipping routes.

Another major problem was sharply higher transport costs, driven by fuel prices and insurance costs.

“War-risk insurance premiums have risen by as much as 40%, making it harder for Thai exporters to offer competitive prices,” Arada said.

“Because of these negative factors, we expect full-year rice exports to come in well below the seven-million-tonne target.”

Thailand exported 7.9 million tonnes of rice worldwide in 2025.

This year’s shipments had already been forecast to fall to the lowest level in five years because of the stronger baht and competition from major rice exporters such as India and Vietnam.

The Thai government is now planning to expand rice exports to Africa through various market channels, including rice trade fairs, to attract new buyers, as well as talks with African governments on government-to-government (G2G) deals.

Last year, African countries accounted for about 33% of Thailand’s total rice exports, with South Africa, Senegal and Angola among the main markets, while Asia accounted for 22%, led by China, Malaysia and Japan.

Rising costs delay Vietnam rice exports

Earlier this week, there were also reports that Vietnam, another of the world’s biggest rice exporters, was facing rice export delays because of tensions in the Middle East, which have pushed up freight costs and insurance premiums.

Vietnam News quoted Nguyen Anh Son, director general of the Import-Export Department under the Ministry of Industry and Trade, as saying that delivery times had been extended by 10-15 days, while domestic transport costs had risen from 20,000 dong (about 26 baht) to 30,000 dong (about 40 baht).

Rice exporters are also facing shortages of empty containers and rerouted shipping services, forcing traders to renegotiate contracts, postpone deliveries or hold back new orders.

Oil surge means ‘there may be no fish to sell’

Reuters reported that soaring diesel prices caused by the US-Israeli war with Iran were pushing Thailand’s multibillion-dollar fishing industry towards a standstill, with fishermen warning that they may have to stop going out to sea within days unless the government steps in.

Jumpol Kanawaree, president of the Samut Sakhon Fish Sellers Club (Talay Thai Market), said that at the country’s biggest fishing port in Samut Sakhon, more than half of the trawlers were already docked, while those still operating were likely to stop within days.

“After April 1, you may see that there may be no fish sold, because fishing boats can no longer bear the cost of their crews and their families.”

Jumpol said about 800 tonnes of fish from 22 coastal areas were sold at the Samut Sakhon fish market each day, but this was the worst energy crisis in decades, even more severe than Covid-19.

“If we can no longer absorb the costs, we will have to dock our boats because of fuel prices,” local fisherman Prariyes Maneesumphan said.

Government data show that in 2024 Thailand exported US$7 billion worth of fishery products to destinations such as the United States, Japan and China.

Ekniti Nitithanprapas, the finance minister, said on Wednesday that the government was preparing support measures for fishermen, including the supply of B20 biodiesel and palm oil.

Thai diesel prices rose to 38.94 baht per litre (US$1.19) on Thursday after government subsidies ended, up from 29.94 baht per litre in February before the Middle East conflict broke out.

If diesel prices reach 40 baht per litre, fishing trips will no longer be viable, another local fisherman, Boonchoo Lonluy, said, adding that some crews had already started adjusting their voyages to save fuel.

“Now that the price has gone up, we have to sail more slowly, which means we catch less fish,” Boonchoo said.

“We cannot go on like this.”

Calls for urgent fuel relief before 60-70% of boats dock

Mongkol Sukcharoenkana, honorary adviser to the National Fisheries Association of Thailand, said fishermen knew from the start of the Middle East war that soaring fuel prices would become a problem, and had therefore begun talks with the government early on.

The conclusion was to introduce B20 fuel so that fishing fuel costs could be kept at 30 baht per litre.

At that price, fishing operations could still survive, although each boat owner would have to decide on a trip-by-trip basis whether it remained worthwhile.

The six-baht-per-litre fuel price hike pushed fishing fuel costs up to 37 baht per litre, above the ceiling of 35 baht per litre that fishermen say operations should not exceed.

If the government cannot control prices, 60-70% of fishing boats are expected to be docked by the end of March 2026.

“At present, 8,100 fishing boats have applied for fishing licences, and 6,000 of them have applied for green diesel codes through the National Fisheries Association of Thailand. They consume 50 million litres a month, down from 80-90 million litres previously, or about 1.2-1.3 million litres a day.”

Mongkol said the impact of higher oil prices was severe in 2009, when global crude prices stood at US$150 a barrel, but it was not as serious as this time, when some petrol stations were not even providing service.

He added that even boats tied up at port still faced labour costs, because owners had to continue paying workers to retain them.

At the same time, seafood prices were expected to rise by at least 30-50%.

“How fishing boats adapt in this situation depends on the management of each vessel. Personally, I can still go out for another month, but fuel alone costs 600,000 baht per trip for a pair trawler, not including wages.”