Fluctuating commodity prices a concern

Kenanga Research said there were distinct patterns in gross profit margin sensitivities across Dutch Lady, Nestle, F&N and Power Root.

PETALING JAYA: Despite enjoying relatively resilient demand for staple-related products, consumer companies will likely see their margins come under pressure due to volatility of commodity prices.

Kenanga Research, which maintained its “neutral” stance on the consumer sector, noted in its recent study that commodity prices and their influence on input cost have a significant impact on the profit margins of consumer staple firms with varying time lags.