Food industry calls for greater government support as Middle East war prolongs cost pressures

The Korea Food Industry Association said Friday it held a roundtable with the Ministry of Agriculture, Food and Rural Affairs and industry representatives to discuss the food sector's response to the prolonged Middle East war.

Major food companies — including CJ CheilJedang, Nongshim, Daesang, Lotte Chilsung and Pulmuone Foods — attended the meeting and shared updates on how the conflict's continuation is affecting their operations.

Participating companies said rising oil prices, exchange rates and logistics costs, combined with sluggish domestic demand, are increasing cost burdens and eroding profitability. Many said they have shifted to emergency management footing to cope.

Beverage makers said the surge in costs for aluminum cans and PET bottles — packaging materials that account for a large share of their expenses — is seriously hurting margins. Ramyun producers said they are struggling to absorb higher prices for palm oil, soybean oil and other edible fats, as adjusting retail prices remains difficult.

The association said naphtha supply — a key raw material for packaging — fell to about 70 percent of normal levels in March and April, immediately after the war broke out, and has since recovered to 85–90 percent as of June, but remains a significant burden.

Companies said they expect the business environment to remain difficult in the second half of the year and called on the government to expand policy support.

They specifically requested stronger backing for export competitiveness — including assistance navigating country-specific certifications and regulations, development of a K-food certification framework, expansion of export vouchers, greater support for participation in overseas trade fairs, and increased logistics cost subsidies.

In addition, companies asked the government to consider temporarily raising the deduction rate and ceiling for the deemed purchase tax credit applied to food manufacturing and processing, to ease the financial strain from across-the-board cost increases.

The Ministry of Agriculture, Food and Rural Affairs said it will continue monitoring the supply situation for raw materials and packaging based on the concerns raised at the meeting, and will strengthen policy support. The ministry added it plans to maintain ongoing communication with the industry.