FMCG Products May Become Costlier from December

Prices of fast-moving consumer goods (FMCG) may rise again as manufacturers face increasing raw material costs. During the July–September quarter, palm oil prices increased 21% year-on-year, while sugar prices rose 18%. Costs of crude oil-based inputs and packaging materials also climbed, putting pressure on profit margins. Companies are reportedly delaying price hikes to protect consumer demand during the festive season. However, they are considering increasing prices from December while controlling expenses by reducing discounts and advertising costs.

A price increase could push rural consumers towards cheaper brands or smaller packs, potentially affecting sales volumes. A stronger El Niño impact on agricultural output could also drive food prices higher. Mayank Shah, chief marketing officer of Parle Products, said price revisions from December would depend on agricultural commodity prices and geopolitical developments. Nestlé India CMD Manish Tiwary highlighted food inflation as a major challenge. He expects coffee and wheat prices to remain within a range during the December quarter, while sugar and edible oil prices could stay near elevated levels. Cocoa prices also continue to fluctuate due to weather-related changes.