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FMCG products mean those things which are in high demand and people use them daily.
Prices of fast moving consumer goods (FMCG) products like edible oil, soap, tea, coffee, chocolate and biscuits have increased by 20% in 6 months. FMCG products mean those things which are in high demand and people use them daily. Their prices may increase further by 30% in January-March.
Prices of raw materials like palm oil, coconut, tea, cocoa and coffee have increased by 35-175% since April 2024. Due to this the increased cost is being compensated. Nuvama Institutional Equities said in a report, 'Some FMCG companies will increase prices again in January-March.' In the last 3 months, common household items have become costlier by 10%.
Nuvama's report states that it has become difficult for companies in categories like soap, snacks and tea to increase margins.
Margin is a big challenge for FMCG companies Nuvama's report states that it has become difficult for companies in categories like soap, snacks and tea to increase margins. Due to the increase in prices of commodities like palm oil and tea by about 30 percent annually, their costs are increasing, but it has become difficult to compensate for it.
The challenge is that if prices are increased beyond a limit, urban demand will start declining again, which has recently shown signs of improvement. Due to this, the income of some FMCG companies is expected to increase by only around 5 percent in January-March. This growth will also be seen not due to increase in sales, but due to increase in prices of products.
Edible oil prices increased the most According to Japanese brokerage firm Nomura, in the six months till September, the prices of Saffola brand edible oil in India increased the most by 20 percent. During this period, Marico increased the price of Parachute Coconut Oil by 10 percent. Nomura estimates that between October and December the company has increased the prices of products by an average of 7.3 percent.
Tea is the most expensive, wholesale prices increased by 33% Nomura's report estimates that Tata Consumer Products may increase tea prices by 25-30 percent between October and March 2025. More than half of this increase has taken place in October-December alone.
This has been cited as the reason for the increase of tea prices in auctions by about 33 per cent in recent months. The report also says that Nestle has increased the prices of products like chocolate by 4.9 percent in October-December. Snacks company Bikaji has increased prices by about 2 percent in October-December.
HUL, Godrej increased prices by 10% According to the report of Nuvama Research, FMCG companies Hindustan Unilever and Godrej Consumer increased the prices of products by about 10 percent in 2024. This increase was not done all at once, but gradually. Its report said that in October-December, HUL has increased prices by an average of 2 percent and Godrej Consumer by 4 percent.
