It's a pricey market this festive season
Spends on basic grocery purchases are getting dearer close to the festive season which India Inc fears may impact consumer sentiments. Home and personal care majors have hiked prices of toilet soaps, shampoos and detergents for the third time this...
By TNN |
MUMBAI: Spends on basic grocery purchases are getting dearer close to the festive season which India Inc fears may impact consumer sentiments. Home and personal care majors have hiked prices of toilet soaps, shampoos and detergents for the third time this year.
P&G has hiked prices of Tide detergent and Pantene shampoos by 2-4%, while HLL has also hiked prices of Surf by 4-5% and toilet soaps like Lux and Hamam by 50 paise to a rupee.
A P&G spokesperson said prices have gone up mainly on account of inflationary pressures. Consumers are already bearing the brunt of rising basic commodity prices in recent months.
Wholesale dealers say speculators are resorting to satta on various commodities like dals, sugar, wheat etc which have shot up sharply in recent months. The rising commodity costs have been attributed to a surge in exports owing to a global shortage.
While wholesale prices of lentils like chana and urad have been on an uptrend over the past few months, retail prices of split lentils like urad dal and chana dal have nearly doubled due to conversion costs of 30-40% and retailers’ margins of 60%, according to sources.
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Vegetable oil prices have gone up by an average of 20-25% in the last six months. BV Mehta, executive director, Solvent Extractors’ Association of India reasoned that almost 40% of India’s edible oil demand is met through imports, and any change in the international prices are immediately reflected in the domestic market.Crude palm oil is used as a base for most edible oils and it saw a rise of 21% in the price from Rs 32,946 per tonne in January to Rs 40,200 as on September 20. RBD Palmolein also saw a rise in price from Rs 25,992 per tonne in January to Rs 42,500.
Sodium Hydroxide or caustic soda prices have been ranging between Rs 23,000 per tonne to Rs 25,000 per tonne. In the last 15 days, the CIF price has gone up to $340 from $310, however, dealers in caustic soda said that fluctuating prices are a regular phenomenon in this bulk chemical depending on the demand and supply situation.
The price is down from last year’s high of Rs 30,000 per tonne. Market watchers are however, worried about the impact on consumer sentiments which may be affected demand in the long run. Industry officials said prices are being tweaked mildly but regularly so that consumers do not feel the pinch sharply.
Detergents, an area where both companies are fighting hard to protect market shares is one segment where input costs like crude oil and packaging costs have shot up substantially in recent times.
“Cost pressures have been phenomenally high this year, especially in raw material and packaging costs. ” a senior P&G official said. Retailers said sustained price hikes may see consumers reverting to down trading to smaller brands to cut costs.
Corporates are trying to cuts costs in the back-end and supply chain to reduce the impact of the cost pressures. Fortunately for manufacturers, the overall fast-moving consumer goods market has been quite upbeat with the overall industry growing at over 7% and rural growth rates at over 14%.
In fact, industry officials said the price hikes have been undertaken not to raise profit margins but to cover up the rising input costs.
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