FMCG companies have suffered a setback due to the Russo-Ukraine war. They believe that due to this, there will be a jump in the prices of wheat, edible oil and crude oil.
The burden of inflation is increasing on the common man. Even for everyday necessities, now you may have to loose your pocket more. FMCG companies are preparing to increase the prices of their products due to the rise in the prices of commodities like wheat, palm oil and packaging goods. FMCG companies have also suffered due to the Russo-Ukraine war. They believe that due to this, there will be a jump in the prices of wheat, edible oil and crude oil.
The situation of companies like Dabur and Parle is being monitored and they will take thoughtful steps to deal with inflationary pressures. Some media reports said that Hindustan Unilever (HUL) and Nestle have increased the prices of their food products last week.
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Difficult to predict due to high volatility in prices
Mayank Shah, Senior Category Head, Parle Products, said, “We are expecting a 10-15 per cent hike in prices by the industry.” Shah further said that there is a lot of volatility in the prices and hence it is difficult to say right now how much the price hike will be. He further said that the price of palm oil had gone up to Rs 180 a liter. Now it has come down to Rs 150 a liter. Similarly, after going to $ 140 per barrel, the price of crude oil has come down to $ 100. “However, the prices are still higher than before,” Shah said.
Shah says that companies are also hesitant to increase the prices because the demand has increased after COVID and they do not want to tamper with it. Last time FMCG companies did not pass the burden of price hike completely on to the customers. Shah said, “Now everyone is talking about 10-15 percent growth. However, the cost of production has increased much more. ”He said that Parle has enough stock at present. The decision to increase the prices will be taken in a month or two.
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Will take measures after deliberation: Dabur India
Echoing this view, Dabur India’s Chief Financial Officer Ankush Jain said that inflation continues to remain high and it is a cause for concern for the second year in a row. “Consumers have reduced their spending due to inflationary pressures. They are buying smaller packs. We are watching the situation and after due deliberation, we will take measures to avoid inflationary pressure.
What do experts say
Edelweiss Financial Services Executive Vice President Abneesh Roy said that FMCG companies are passing the burden of inflation on the consumers. “Hindustan Unilever and Nestle have the power to set high prices. They are passing on the burden of price hike of coffee and packaging goods to the customers. We estimate that all FMCG companies will increase prices by three to five percent in the first quarter of 2022-23. have been extended. These companies have passed some of the burden of the increase in commodity prices to the consumers.
(Input-PTI)
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