As per the report in leading business daily, in the wake of several inflationary concerns such as the record high fuel prices, increase in the minimum support price (MSP) for farmers as well as upward price trajectory seen in respect of different commodities, prices of different products are set for upward revision.
Daily use items will likely see a price hike of as much as 5-8% from the next quarter. And reports suggest that some of the companies have already increased prices of their products.
Since mid-August, fuel prices have been on fire and today hit a fresh lifetime high with petrol and diesel surging by 39 paise and 44 paise per litre in the national capital region. After the latest price revision, petrol in Delhi has breached the Rs. 80 per litre mark. The devaluation of the rupee against the US dollar is attributed for continuous fuel price rise as India imports most of its crude requirements.
The surge in global crude oil prices has also impacted petrol derivatives which is the key input for FMCG companies. These are used in packaging as in boxes and bottles.
"The environment is inflationary, and it is not possible to hold on to prices going forward. We will have to increase prices by 5% to begin with, to offset multiple pressures... we will try to balance value and volume growth," Varun Berry, managing director of Britannia Industries was quoted as saying in the business daily report.
Another FMCG company Parle Products, senior category head told the daily, "We will take price increases of about 7-8%. The impact of MSP itself has been in the range of 10-12%, but we are not passing the entire cost escalation and taking some hit on the bottomline too".
A report by Jefferies suggests that HUL has already increased prices of some of the products including detergents, select soap and skin care brands by 5-7% last month. Marico that sells Saffola edible oil and parachute hair oil also increased prices of its hair oil products by 7%.
Industries where components and other parts are imported from outside will also increase prices of their products such as automobile manufacturers, smartphones. Also, if the rupee continues its losing streak, consumer durable companies may further revise price of their products higher.