As we usher in 2020, our grocery bill may further pinch our pockets as FMCG companies may hike prices across some of the product categories even despite consumption slowdown. The price hike shall come mainly due to increase in raw material and commodity costs. Here are some of the daily use items that may become dearer going forward:
1. Milk: Due to extended rainy season and late start of flush season for milk production, the supply of milk across the country is under stress for the last few months. And this pushed dairy companies including Mother Dairy and Amul to increase price of milk packets in the range of Rs. 2 to Rs. 3 per litre. Also, the increase in milk price has been triggered by an increase in the price of cattle feed by over 35%.
2. Cooking Oil: Higher import costs have led to a sharp increase in the price of edible oils. Palm oil price in a matter of two months has seen a price rise of more than 35%. And this has pushed the prices of other edible oils higher. In November end and early December some of the edible oil companies resorted to marginal price hike and if prices sustain at this level, they may be forced to go for another round of price hike. And the likely decision on pricing of edible oil may take 2-3 weeks time.
As per an IANS report citing industry sources, prices of cooking oil are expected to go up further.
3. Bread: In case of bread, increasing input costs is pushing bread manufacturers to go for a price hike and if the condition remains as though the All India Bread Manufacturers Association will be forced to increase bread prices by as much as 7-12% in next two weeks time. Of the different players in the industry, small and medium manufacturers will be the first ones to go for price hike.
4. Biscuits: Rising input cost such as that of wheat flour, sugar and edible oil is likely to result in 3-6% price hike for biscuits. For smaller pack, the hike shall be in the form of reduction in the quantity while for large packs the price increase will be in terms of absolute value. "The price of wheat flour has definitely gone up year-on-year. In South, it is selling at about Rs 24 per kg and it will be slightly lower in North India. There are additional and handling costs that also add costs for small and medium manufacturers", an official from Roller Flour Millers' Federation of India is cited as saying in a report.