FMCG firms are facing inflationary pressure on their key raw materials that is indeed reflecting on their marginal hike on their regular products price to offset it.

Certain FMCG companies such as Marico and others have already spiked their product prices, while brands like Dabur, Parle and Patanjali are closely monitoring the situation.

Mayank Shah, Senior Category Head, Parle Products ."We have seen a significant rise in input cost and especially edible oil in the last three to four months and that is putting pressures on our margins and costs. As of now, we have not taken any price hike but we are closely monitoring it and if it goes like this then probably, we may go for a price hike."

He belives that these commodities are cyclic in nature. FMCG players have been trying to absorb the price increase of raw material like edible oil, coconut oil, and palm oil, but they are unlikely to hold the prices of their commodities for a long time as that will impact their gross margins.

Commenting on the price hike Mayank states, "It will be across products as edible oil is being used in all products. It would be at least four to five percent."

In response to the price hike, Lalit Malik, CFO, Dabur India says, "Going forward too, we expect some inflationary pressure in key commodities. Our efforts will be to absorb the raw material price increase through our synergies and cost efficiencies, and undertake only selective and judicious price hikes, which will also depend on the competitive scenario in the market."

S K Tijarawala, Patanjali spokesperson states, "We always try to absorb the market oscillation but if compelled by the market factors, we would take a final decision on that."

In Q3 quarterly update, Marico said, "The quarter (October-December) was also characterised by inflationary pressure in key raw materials necessitating cutting back on some promotions and taking effective price increases across both Parachute and Saffola edible oil portfolios.

Edelweiss Financial Services Executive Vice President Abneesh Roy said many key raw materials are up sharply such as palm oil, tea, copra, edible oils and more.

He further adds, "Price growth will come back in 2021 for the consumer companies after raw material pressure starts impacting their gross margins."