We can’t survive for long, food producers say amid diesel price surge

2026-03-26 - 07:10

Malaysian Food Manufacturers Association president Ding Hong Sing said association members are still deliberating whether to raise product prices, expressing concern that this would affect consumer demand. SUBANG JAYA: The survival of food manufacturers, especially small and medium enterprises, is at risk due to the rise in diesel price amid the Middle East conflict, says an association. Malaysian Food Manufacturers Association president Ding Hong Sing said many companies were now struggling to remain profitable due to low margins and escalating expenses. He said some manufacturers reported an additional RM60,000 to RM80,000 in monthly diesel expenses, while others estimated that their total increase in operating costs could reach up to RM100,000 after factoring in logistics costs. “Many of our members operate on very thin margins. With costs rising at this rate, some may not be able to sustain operations if the situation continues,” he said at a press conference. Ding said distributors and agents were also under pressure as their margins are typically fixed at around 8% to 10%, making it difficult to absorb the higher fuel costs. He said association members were still deliberating whether to raise product prices, expressing concern that this would affect consumer demand. “In addition to fuel, plastic packaging costs have also increased sharply. Plastics are derived from petroleum, and suppliers have reported price increases exceeding 100% for some materials. “In some cases, even with money, manufacturers cannot secure sufficient supply. Packaging materials are critical to production. Without them, factories cannot operate,” he said. Ding said disruptions in global supply chains had also led to a shortage of shipping containers, further increasing export costs which now ranged between RM2,000 and RM4,000 per container. He urged the government to implement targeted support measures, including a loan moratorium and easier access to financing, to help businesses weather the crisis. The price of diesel in West Malaysia has been fixed at RM5.52 per litre until April 1, a RM1.60 increase from RM3.92 per litre in the middle of March.