FMCG firms warn of more price hikes as commodity prices soar

Fast-moving consumer goods (FMCG) companies have warned of more price hikes across products such as soaps, body wash and tea, following volatility in commodity prices, especially crude palm oil, which is used in the manufacture of soaps, shampoos, detergents, cosmetics and food products.

- Suneera Tandon

Palm oil prices are up 40% year-on-year in the December quarter, according to the third-quarter earnings investor presentation of Hindustan Unilever Limited (HUL). Tea prices were up 24% year-on-year, but down 7% sequentially in the same period.

Companies such as HUL and Godrej Consumer Products Limited (GCPL) have already raised prices in the December quarter.

On Friday, Mumbai-based Godrej Consumer Products, which makes Cinthol and Godrej No. 1 soaps apart from hair colours and hand wash, said it took pricing actions across its washing products portfolio to counter higher raw material prices.

Rival Hindustan Unilever Ltd (HUL), too, introduced price hikes in the December quarter; more could follow, the company's management said in its earnings call last Wednesday.