Milk Producer Warns of Price Hike Amid Supply Crunch
Why It Matters
A modest milk price increase could erode consumer purchasing power while prompting the dairy sector to diversify packaging, influencing cost dynamics across Malaysia’s food‑and‑beverage industry.
Key Takeaways
- •Farm Fresh may raise milk prices due to soaring resin costs.
- •Plastic resin prices have doubled, hitting 8,500–8,600 ringgit per ton.
- •Company shifts resin sourcing from Middle East to China, stock lasts July‑August.
- •Expected price hike: about 3% or 50 cents per litre.
- •Exploring paper cartons and glass bottles to cut plastic dependency.
Summary
Malaysia’s leading dairy producer Farm Fresh Bahad warned it may raise bottled‑milk prices as global tensions surrounding the Iran‑linked conflict push plastic‑resin costs sharply higher.
The price of the PET resin used for its 1‑litre and 2‑litre bottles has jumped from roughly 4,000–5,000 ringgit per ton to about 8,500–8,600 ringgit, effectively doubling. CFO Muhammad Ky Mat Hassan said the firm is de‑risking its supply by moving away from Middle‑East‑linked NAPA and buying from China, with current inventories expected to last until July or August. Higher diesel and electricity expenses also squeeze margins.
Hassan warned that a prolonged blockade of the Strait of Hormuz could force tougher decisions, noting that “if plastic price keeps soaring up, consumers might not be able to take any more further price increase.” The company estimates any adjustment would be modest—around a 3 % rise, or roughly 50 sen per litre.
The potential price hike puts pressure on Malaysian households and could accelerate Farm Fresh’s push toward alternative packaging such as paper cartons and glass bottles, reshaping its cost structure and competitive positioning in a price‑sensitive market.
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