FMCG companies are considering another round of price hikes to mitigate the impact of unprecedented levels of inflation in commodity costs such as wheat, palm oil, and packaging materials, which may force consumers to pay more for their daily essentials.
Furthermore, the ongoing conflict between Russia and Ukraine has dealt another blow to FMCG producers, as they anticipate higher wheat, edible oil, and crude prices.
Companies like Dabur and Parle are keeping a close eye on the situation and plan to implement gradual price hikes to combat inflationary pressures.
According to some media reports, food manufacturers such as HUL and Nestle raised their prices last week.
"We expect the sector to raise prices by 10-15%," Parle Products Senior Category Head Mayank Shah told PTI.
Abneesh Roy, Executive Vice President of Edelweiss Financial Services, commented on the current situation, saying that FMCG manufacturers are passing on significant inflation to consumers.
"FMCG companies with strong pricing power include HUL and Nestle. Inflation is being passed on to coffee and packaging materials. We anticipate that all FMCG companies will increase their prices by 3 to 5% in Q1FY23 "He continued.
Nestle India has raised the price of its popular Maggi noodles by 9 to 16%, as well as milk and coffee powder, the reports added.