Maybank Securities (Thailand) has reiterated its neutral stance on the Thailand Food & Beverage sector in 2026, citing persistent cost pressures from rising raw material prices. The brokerage highlights that while food raw material costs are expected to rise only moderately for now, any prolonged escalation of the ongoing war, particularly in Iran, could pose downside risks to gross profit margins (GPM) of food companies from 2Q26 onwards.
Despite these challenges, i-Tail Corporation (ITC) remains Maybank’s top pick within the sector, largely due to its resilient cost-plus business model, robust demand in the pet food segment, and superior net profit margins (NPM) compared to its peers.
Maybank anticipates a rise in Thai food production costs as elevated oil prices drive up fertilizer expenses and intensify existing trade bottlenecks. This confluence of factors is expected to push agricultural prices higher, especially amid the drought conditions forecast for the latter half of the year due to El Niño.
Nonetheless, Maybank does not predict a sharp surge in agricultural prices, assuming the conflict in Iran will conclude within weeks rather than months. The brokerage notes that companies such as Charoen Pokphand Foods (CPF) and Thai Union Group (TU) are most exposed to rising raw material costs, whereas ITC is seen as relatively insulated because of its effective cost-transfer mechanisms and strong fundamentals.
Tuna prices are expected to be especially vulnerable to oil price fluctuations, given that fuel accounts for 30–50% of fishing operating costs. Maybank’s analysis found tuna prices had the strongest correlation with crude oil (0.51), ahead of corn (0.40) and soybean meal (0.34). As a result, TU’s GPM for the full year 2026 is subject to the highest downside risk, while CPF and GFPT could also face margin pressure if fertilizer prices continue to rise, leading to higher soybean and corn costs from reduced crop yields.
The outlook for meat processors remains cautious, with first-quarter earnings in 2026 likely to be weak. As of mid-March, corn and soybean meal prices were still at relatively low levels. Although Thai swine and broiler prices showed month-on-month improvement due to hotter weather, they continued to slump year-on-year. Meanwhile, Chinese swine prices fell to RMB 10.4/kg, significantly below CPF’s breakeven costs of RMB 13-14/kg, suggesting the company’s earnings will remain soft in the near term.
On the poultry side, average broiler prices in the first two months of 2026 were still below the prior year’s first quarter average, suggesting ongoing margin pressure for GFPT. Conversely, skipjack tuna prices in early 2026 were 7% below the same period last year, which may help support GPMs at TU and ITC.
Reflecting these dynamics, Maybank has assigned ‘Hold’ ratings to CPF (target price THB 20.90), TU (THB 11.50), OSP (THB 15.10), CBG (THB 36.00), GFPT (THB 9.60), and SAPPE (THB 31.75), while giving ‘Buy’ ratings for ITC, with a target price of THB 18.60, and for ICHI at THB 16.20 per share.
