Despite having raised prices multiple times in the past year, FMCG companies, electronic manufactuers, automobile makers are all expected to hike the prices of their products more in order to keep up with increasing input costs.
Despite having raised prices twice or thrice in the latter half of 2021, consumer goods companies plan to raising prices once again. Prices of fast-moving consumer goods (FMCG) are going to go up in the coming months, as companies hike their prices to keep up with increasing input costs, high cost of logistics, and issues with supply disruptions.
Electronic manufacturing companies have also stated that they will be increasing their prices in several categories. India’s automobile manufacturers may also be looking at price hikes to keep their margins stable as well.
Maruti Suzuki, Hyundai Motor India, Tata Motors, Mahindra & Mahindra, Skoda, Volkswagen, Toyota Kirloskar Motor (TKM) and Hero MotoCorp have already raised prices multiple times in 2021, but without any rebate in input costs, more hikes are likely to be expected. Most of the price hikes have been in response to the higher prices of steel and coking coal.
FMCG companies like Hindustan Unilever Limited, ITC, Parle and others have also been struggling with price hikes in an inflationary input cost environment. The rising cost of edible oils and wheat, along with palm oil doubling over the past year has contributed to reducing margins for such companies. Chemicals essential for the production of beauty and hygiene products have also sent prices of items like soap, shampoos and others soaring.
Prices of commodities are only expected to taper downwards in the second half of 2022. A December report from Motilal Oswal stated that prices of agricultural as well as non-agri commodity prices had increased in Q3 FY2022 before starting to stabilise towards the end of the period. The commodity basket on average witnessed a price increase of 33.5 percent YoY in the same quarter.
But the resurgence of COVID-19 cases and restrictions has sparked fears of further disturbances in global supply chains and the production of raw materials.
(Edited by : Vijay Anand)