Cost pressures facing Malaysia’s food and beverage manufacturers intensified in September as prices of key inputs including wheat, sugar, crude palm oil, packaging materials and animal feed moved higher, according to MBSB Research.
In its latest commodity cost update, the research house said wheat prices rose 37.1% year-on-year and 5.4% month-on-month to US$27,516 per tonne, while raw sugar climbed 14.2% year-on-year and 5.0% month-on-month. Crude palm oil remained elevated, increasing 13.8% year-on-year and 1.2% month-on-month to US$1,197 per tonne.
Packaging costs also remained a concern, with polyethylene terephthalate (PET) resin surging 53.2% year-on-year and 12.5% month-on-month to US$1,268 per tonne, potentially pressuring bottled-water producers such as Life Water and Spritzer.
MBSB said the main relief came from cocoa and coffee. Cocoa prices fell 16.4% year-on-year and 1.2% month-on-month, while Arabica and Robusta coffee dropped 23.9% and 21.5% year-on-year respectively.
The research house said the overall September cost basket remained unfavourable for F&B manufacturers, particularly companies with heavier exposure to wheat, sugar, palm-based inputs and packaging materials.
Feed prices also moved higher during the month, adding another layer of cost pressure for poultry producers.
Soybean meal rose 26.7% year-on-year and 12.1% month-on-month to US$397 per tonne, while corn increased 24.0% year-on-year and 8.5% month-on-month to US$21,717 per tonne.
MBSB said the sharper rise in both feed inputs could intensify margin pressure if poultry selling prices fail to adjust sufficiently.
Integrated producers are relatively better positioned because of scale, procurement advantages and operational efficiencies, although feed costs remain a key risk for Leong Hup International and QL Resources.
On the selling-price side, chicken and egg prices remained firm in August. Grade A, B and C egg prices rose 13.0%, 12.4% and 13.6% year-on-year respectively, while average retail chicken prices were unchanged month-on-month at RM10.88 per kg, but 7.0% higher from a year earlier.
Foreign exchange movements provided some relief.
The ringgit averaged RM4.05 against the US dollar in September, compared with RM4.21 a year earlier, translating into a 3.9% year-on-year appreciation. It also strengthened slightly from RM4.07 in August.
However, the ringgit remained weaker against the Chinese yuan, with CNY/MYR at 0.60, limiting the benefit for companies sourcing goods from China.
MBSB said the firmer ringgit against the US dollar continues to partially cushion the landed cost of dollar-denominated commodities, but commodity, packaging and freight expenses remain the larger drivers of margins.
Despite the less favourable cost backdrop, MBSB maintained its Positive view on the consumer sector, supported by resilient domestic spending, stable employment, manageable inflation and continued household support measures.
It said it continues to favour companies exposed to staples, essentials and value-driven consumption where demand is more defensive and pricing or procurement advantages are stronger. Its preferred names are 99 Speed Mart, Leong Hup International and Nestlé Malaysia.
