Middle East War: Disruption to NZ seafood sector - retail price rises set to follow
Thursday, 12 March 2026
The Middle East conflict is expected to impact the prices of food, with fresh produce likely to see the first initial increases, says Retail NZ.
“We import so much, and not only on the food that's imported, but domestically, food is grown, caught or killed in one area and it's got to be distributed around New Zealand, and that takes freight to distribute it,” said chief executive Carolyn Young.
“The increasing cost of fuel, which has escalated in the last few days, is going to be directly impacted on freight, whether it's internally in New Zealand or externally from importing. We can't escape it.
“As consumers, we know when we go to the petrol station, or if we drive past the petrol station, that the price of fuel has increased and next time we have to fill up we will be impacted.”
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Exactly when consumers would start to see prices on the supermarket shelves creep up would depend on supply, she said.
“We’ll likely see some smaller increases in fresh produce sooner, because fresh produce is turned over by the very nature of it, quicker.
“Products that come in from overseas will obviously be impacted by price because they're on a ship. We know there's a number of ships that are delayed as a result of this conflict, and the longer the delay, the higher the price of fuel is going up and that will have a bigger impact.”
However, Young said with the possibility of some exporters having their shipments returned to New Zealand, some fresh products could actually see one-off drops in prices.
“If businesses are exporting, and it doesn't become viable because of the cost of transport, they may try to sell their product within New Zealand, which would provide consumers a discounted price of that particular product.
“That sort of thing does happen from time to time, if there's a large export cancellation, or there's some reason why a product can't get sent overseas, or the price doesn't work any longer, or whatever it might be. If there's delays in shipping, you can't get it on a ship, there might be the odd product from time to time from an exporter that might decrease, but largely we'll see increasing prices.”
Seafood exporters’ headache
New Zealand’s seafood sector has been caught up in fallout from the escalating war in the Middle East, and it could spell bad news for consumers at the check-out.
Disrupted shipping routes and rapidly rising fuel costs are creating significant challenges for exporters in the sector, according to Seafood New Zealand chief executive Lisa Futschek.
This was creating uncertainty across the entire supply chain, she said.
“The current conflict is disrupting normal shipping routes and port access, which creates a lot of problems for our exporters,” Futschek said.
Talley’s chief executive Tony Hazlett said his organisation had started to feel the impacts of disruption from the war, and was unsure if some of its product would make it to its intended destination.
“We have product currently in transit that was originally bound for ports in the Middle East, which has since had to be redirected to different arrival ports,” said Hazlett. “That creates a lot of challenges for us.
“In some situations, if the product cannot be delivered, we will have no choice but to return the shipment back to New Zealand. It looks like this will be the case for some of our product already en route.”
The US-Israel war on Iran has seen violence and disruption across the Middle East, closing the Strait of Hormuz. The closure of the critical sea route, responsible for the transportation of about 20% of global oil consumption, has sent oil prices soaring, impacting the cost of fuel and pumps in New Zealand.
According to oilprice.com, LNG shipping rates have soared 650% to US$300,000 per day over the past week.
In addition to rising freight costs and uncertainty about whether product can reach the final customer before spoiling, the conflict has pushed up global marine fuel prices, adding further pressure on seafood operators already managing tight margins.
Futschek said the cost of marine fuel had increased sharply since the conflict escalated, “which directly impacts the cost of operations in New Zealand”.
“These are costs the industry is having to absorb in the short term, but inevitably they will place pressure on prices that consumers see,” she said.
Seafood exports to the region are about $20 million per year, and was a growing market for New Zealand seafood, particularly for premium products, prior to the conflict.
Futschek said the Free Trade Agreement with the Gulf Cooperation Council, allowing seafood exports to enter those countries in a tariff-free environment, had been a real opportunity for growth for the seafood exporters.
Sanford chief executive David Mair said the escalating war was having varying impacts on New Zealand seafood companies.
While there was no material impact on Sanford at this stage, Mair said if the conflict continued it would push up the cost of marine fuel further.
New Zealand exporters both ship and air freight products, with fresh products such as salmon sent overseas by air freight.
About 60% of Sanford’s salmon is fresh and air freighted, most of it sent to China and the US.
Sanford mostly air freights its product, although it ships some product to Europe, which Mair said had been disrupted.
However, he said disruption from the war was similar to that of the pandemic, and changes to regular routes and strategies regularly forced businesses to turn to alternative options, and were all part of being in business.
The true impact of the conflict depended on how long it continued on for, he said.
“If this carries on, Talley’s will be the same, and so will Sealord. We use marine diesel as a fuel for our fishing boat, so it will impact [us], but there's always going to be disruption.
“If there was a big storm, there's disruption … it was like when the tariffs came in.
“Of course, we see costs going up, but kind of so what. It's a bit like the cost of living in New Zealand, it's not going down,” said Mair.
“It's not business as usual, but businesses plan that things goes wrong, or the price of all goes up, or the price of all goes down.”