Companies that produce Fast Moving Consumer Goods (FMCG) are once again concerned about high inflation. After the prices of goods like sugar and wheat rose and then steadied at the same levels, crude oil prices also increased. This has made FMCG businesses’ worries even more pressing. In addition, the current monsoon season’s August drought had an impact on rural demand. However, FMCG firms are cautiously upbeat about the monsoon’s recovery and the rise in demand before the holiday season.

Although inflation has continued since 2021, the recent increase in the price of crude oil is worrying. This may turn into an issue. We have been able to pay these higher levels despite the rising costs of wheat and sugar. However, the years 2021 and 2022 saw extremely high inflation rates.

Since it makes up a small portion of the cost, pricey crude oil is not a significant problem. prices for packaging and shipping have gone up by 10% to 20%, although they still make up a small portion of overall prices. Between 8% and 10% of the FMCG company’s overall costs are made up of packaging and freight. On the other hand, the majority of businesses are reporting an increase in demand as a result of increased consumption brought on by the September rains.

Farmers are not now concerned. When compared to July and last year, sales of FMCG products fell in August, while several products’ stock levels in retailers rose. FMCG sales, which include everything from shampoo to detergent, decreased 8.4% in August compared to the prior month. Compared to the previous year, there was a decrease of 11.2%. Despite an increase of 1.9% over the previous year in urban sales, rural sales fell. Compared to the prior year, there was a 17.2% decrease. Commodity prices are still high, and it must deal with cost concerns. There is no decrease in pressure. Profit will continue to be squeezed. Of course, depending on how each industry is being affected, this may differ between sectors. Uneven monsoon conditions and rising crude oil costs might hurt margin margins.