New Delhi: In the aftermath of the Lok Sabha elections, India braces for a continued inflationary trend with no respite in sight. Major companies in the FMCG sector are either gearing up to raise prices or have already done so, citing a 2 to 17% increase over recent months. Household names like Tata, Dabur, and Emami are among those signaling impending price hikes.
The driving force behind these increases is the soaring cost of raw materials coupled with shrinking profits, leaving companies with little choice but to pass on the costs to consumers. This trend is substantiated by trade data and analyst reports, which show significant price rises across various product categories, directly impacting consumer budgets.
ICICI Securities anticipates an average price increase of 1 to 3% in FY 2024-25, while Nuvama Institutional Equities warns of potential further hikes if current conditions persist.
A snapshot of recent price adjustments reveals:
- Nestle’s Coffee and Maggi Oats Noodles seeing an 8 to 17% rise.
- ITC’s Aashirwad wheat flour up by 4%.
- Godrej Consumer Products planning a 4 to 5% increase on soaps and detergents.
- Colgate’s Palmolive body wash and Pears body wash both experiencing hikes.
- Bikaji Foods projecting a 2 to 4% increase on its offerings.
Despite a temporary halt in price increases during FY 2023-24 due to falling raw material costs, companies had previously raised prices from 2022 to early 2023 to maintain margins. Now, even with declining crude oil and palm oil prices, the upward trend in other commodities like milk, sugar, coffee, copra, and barley necessitates further price adjustments.
Additionally, tomato prices have notably doubled in South India due to reduced production from severe heatwaves, contrasting with less impact seen in North India. Wholesale tomato prices have soared to Rs 40-80 per kg in states like Maharashtra, Karnataka, Andhra Pradesh, and Tamil Nadu.
