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Consumer firms unlikely to hike prices for now

Industry executives said that FMCG companies have already hiked product rates in recent times due to elevated commodity prices to the extent possible without risking demand and are covered at least for the next three months due to long-term contracts.

India inc, Mahindra, FMCG firms, FMCG, India news, Indian express, Indian express news, current affairsIndustry executives said that FMCG companies have already hiked product rates in recent times due to elevated commodity prices to the extent possible without risking demand and are covered at least for the next three months due to long-term contracts. (Representational)

Automobile and FMCG firms facing the prospect of escalating input prices in the aftermath of the Ukraine crisis are likely to put on hold any price hike, at least till the first quarter of FY23, to gauge how the geopolitical situation pans out. Even air carriers, who are reeling under high aviation turbine fuel prices but have recently witnessed an uptick in traffic, are unlikely to raise fares anytime soon.

Industry executives said that FMCG companies have already hiked product rates in recent times due to elevated commodity prices to the extent possible without risking demand and are covered at least for the next three months due to long-term contracts.

Similarly, most auto firms in the passenger vehicle (PV) category raised prices in January itself, and therefore, the earliest they are likely to take stock for another round of hike would be in April. “There’s no clarity at the moment as to how the Ukraine crisis will pan out, so we will have to wait and watch,” RC Bhargava, chairman, Maruti Suzuki India, told FE.

So far during the current fiscal, Maruti Suzuki and most other PV manufacturers have already hiked prices four times. Normally, they do so twice a year.

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Analysts said that the current geopolitical crisis due to tensions between Russia and Ukraine is expected to result in further inflation in commodity prices, which have remained high over the past few quarters due to global supply chain disruptions. However, with demand returning with the Covid-led restrictions being eased, the companies want to tread cautiously.

Inflationary pressures impacted rural demand of HUL during the third quarter as 30 per cent of its business comes from price-sensitive packs. fe

First published on: 28-02-2022 at 03:00:51 am
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