April PET Price Up 59% YoY; Beverage Packaging Costs Under Pressure

Overview

This report tracks the cost index for China's consumer staples industry for April 2026. The core conclusion is that packaging material cost trends are rising, especially with PET prices surging significantly driven by global oil prices, creating cost pressure on sectors such as beverages and pet food; meanwhile, the frozen food sector enjoys cost benefits due to falling prices for raw materials like pork. The report analyzes the profit margin change risks faced by different companies by quantifying the cost structures and lock-price policies of each sub-sector.

Core views

Significant packaging material cost pressure: In April, packaging material cost trends rose, primarily driven by PET. As of April 30, the spot PET price was approximately 9,490 CNY/tonne, up 54% YTD and 59% YoY. Additionally, aluminum prices rose 24% YoY, and pulp rose 12% YoY. This led to cost indices for beverage, pet food, and soy sauce segments relying on PET packaging rising MoM by 1.5%, 1.5%, and 1.4%, respectively. Sub-segment cost performance divergence: In contrast to rising packaging costs, falling prices for some raw materials brought cost benefits. Frozen flour and rice cost indices fell 2.1% MoM, frozen baked goods fell 1.8%, and pre-prepared dishes fell 0.8%, mainly benefiting from declines in pork (down 29% YoY), shrimp, fish, and milk powder prices. The beer segment cost index rose slightly, mainly impacted by aluminum price increases, but barley cost locking is expected to provide a significant cost advantage of mid-to-high single-digit percentages YoY. Dairy and raw milk supply/demand improvement: Raw milk supply and demand balance continues to improve. In the third week of April, domestic raw milk prices stabilized at 3.01 CNY/kg. Although showing a slight downward trend, there remains an approximate 25% price advantage compared to imported dry milk powder prices (converted), helping dairy enterprises control costs. Other raw material trends: Palm oil prices rose 1% MoM and 5% YoY; soybean prices fell 1% MoM, soybean meal fell 6% MoM; molasses prices rose 10% MoM, but spot prices imply a 23% decline YoY; pepper prices fell 4% MoM and 2% YoY. Protein prices showed mixed performance; pork, duck meat, shrimp, and fish prices fell MoM, while chicken and beef prices rose MoM.

Analysis framework

The report adopts a bottom-up cost breakdown approach. First, track spot price trends for key raw materials (such as PET, aluminum, pulp, agricultural products, etc.) and calculate their YoY and MoM changes. Subsequently, combine the cost structure of leading companies in each sub-sector (i.e., the proportion of each raw material to Sales Cost COGS) to estimate the theoretical impact of raw material price fluctuations on unit cost and Net Profit Margin (NPM). Finally, include company-specific lock-price policies (such as forward contracts, inventory cycles) as buffering factors to assess actual cost pressures or benefits. This method allows for more precise identification of which companies can better withstand inflation and which can benefit from raw material price drops.

Methodology notes

• Industry/Industrial Analysis FrameworkPrice-Volume Split

  Decompose total cost changes into raw material price changes and volume/structure changes, further breaking down the price contribution of specific raw material categories (e.g., PET, aluminum, pork, etc.).

  By breaking down the price volatility of specific raw materials and their proportion in costs, the report can precisely quantify how much a price increase in a certain commodity erodes profits for the final product, rather than just looking at overall CPI/PPI.

• Industry/Industrial Analysis Framework

  Transmission mechanism from upstream raw material prices to downstream consumer goods costs and the buffering effect of lock-price policies

  The report not only focuses on current upstream raw material prices but also emphasizes analyzing companies' ability to smooth short-term price volatility through long-term contracts, futures hedging, or inventory management (lock-price policies), which is key to judging short-term earnings certainty.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Nongfu Spring (Beverage)

  Adversely Affected

  Weaknesses

  High proportion of PET in COGS (approx. 29%); surge in PET prices directly impacts costs

  Comparison

  More severely impacted by packaging costs compared to dairy enterprises

  Risks

  Sustained high PET prices; cost pressure becomes evident after lock-price policy expiration

• Dongpeng Beverage (Beverage)

  Adversely Affected

  Weaknesses

  Relatively high proportion of PET in COGS (approx. 18%)

  Comparison

  Similar to Nongfu Spring, affected by PET price hikes

  Risks

  Pass-through ability may fall below expectations

• Zhongchong Shares/Pettie Pet (Pet Food)

  Adversely Affected

  Weaknesses

  Both chicken and PET prices rising push up costs

  Comparison

  Cost pressure greater than frozen food enterprises benefiting from agricultural product price drops

  Risks

  Overseas segment cost volatility

• Anjoy Foods/Sanquan Foods (Frozen Food)

  Benefited

  Strengths

  Falling pork, shrimp, and fish prices significantly reduce raw material costs

  Comparison

  Cost improvement magnitude superior to beverage and condiments segments

  Risks

  Small rise in starch and palm oil prices partially offsets benefits

• CR Beer/Chongqing Beer (Beer)

  Neutral to Positive

  Strengths

  Barley cost locking expected to yield mid-to-high single-digit percentage cost advantage

  Weaknesses

  Aluminum price rise brings some pressure

  Comparison

  High proportion of barley in cost structure; locking strategy effectively hedges part of inflation

  Risks

  Sustained significant rise in aluminum prices

Key data

• PET Price YoY Increase59%As of April 30, 2026, up 54% YTD
• PET Spot PriceApprox. 9,490 CNY/tonneDriven by rising global oil prices
• Aluminum Price YoY Increase24%April data
• Domestic Raw Milk Price3.01 CNY/kgThird week of April, approx. 25% discount vs imported dry milk powder
• Pork Price YoY Decrease29%Driving down frozen food costs
• Beverage Cost Index MoM Change+1.5%Dragged by PET, palm oil, cocoa costs
• Frozen Flour/Rice Cost Index MoM Change-2.1%Driven by declining pork costs

Impact & implications

For beverage and pet food enterprises, they face significant pressure from upward movement in packaging material costs in the short term; if unable to fully pass on costs through price hikes, gross margins may be under pressure. Conversely, frozen food and pre-prepared dish enterprises are expected to improve profitability due to falling meat and aquatic prices. Beer enterprises face pressure from rising aluminum prices, but barley cost locking strategies are expected to provide significant cost protection. Investors should monitor the expiration dates of lock-price policies for each company and the stability of upstream supply contracts, especially given the geopolitical conflict background which may affect oil supply.

Risks

• Upstream PET/Chemical enterprises declare force majeure due to oil supply interruptions, leading to contract default risk
• Escalation and extension of Middle East conflicts may lead to further significant cost increases in H2 2026 or 2027
• Raw material price volatility exceeds coverage scope or duration of lock-price policies

What to watch

• Future trends of PET and crude oil prices
• Renegotiation situations after lock-price policy expirations for each company
• Impact of Middle East geopolitical situation on energy and chemical raw material supply
• Continuing trends in pork and raw milk prices