Shares of food and beverage companies are experiencing a renewed decline. At the time of writing, U-PRESID CHINA (00220) is down 5.54% to HK$8.02, while TINGYI (00322) has fallen 4.86% to HK$12.32. YIHAI INTL (01579) declined 1.03% to HK$13.46, and VITASOY INT'L (00345) dropped 0.99% to HK$6.01.

The downward movement follows reports of rising oil prices stemming from Middle East tensions, which has significantly increased the cost of polyethylene terephthalate (PET), a key packaging material for beverages. Analysis points out that while some beverage firms secured prices in advance, the majority of companies in the sector will face sustained cost pressures throughout the year.

Further commentary indicates that from June onwards, as higher-priced PET procurement begins, a major company's beverage segment is expected to see considerable pressure on its gross margin in the second half of the year. Recent research also highlighted that since March and April, a broad-based inflation in logistics costs has become apparent across the covered Chinese consumer staples sector, with several companies acknowledging the issue.

The market is already aware that the cost advantage from previously locked-in packaging material prices, particularly for PET, will gradually turn into a headwind as new procurement cycles begin in the second half of 2026.