PPB Group Warns of Rising Costs Amid Geopolitical Tensions

PPB Group Bhd, a diversified company in Malaysia, has warned that escalating geopolitical tensions may add to cost pressures at its grains and agribusiness operations in the second half of 2026. The rising input costs, including energy and freight, could squeeze margins, especially since PPB's gross profit margin narrowed to 12.9% in the first six months ended June 30, 2026 (1HFY2026) from 13.5% a year earlier.

The company's core wheat supply remains secure, with PPB sourcing mainly from Australia, the US, and Canada. However, wheat prices have risen due to disruptions in grain shipments caused by intensifying conflict and attacks on port infrastructure in the Black Sea region, which accounts for about 30% of global wheat exports.

FFM Bhd, PPB's 80%-owned grains and agribusiness arm, is managing the higher costs through prudent inventory management and operational efficiency. The group also expects a firm ringgit to provide some relief as raw materials are largely denominated in US dollars. FFM operates five flour mills in Malaysia and two in Vietnam.