look news india
The common man may face a big shock on the inflation front. An increase of 6 to 7 percent may be seen in the prices of biscuits, noodles and various types of detergent soaps. According to a report by The Economic Times, the Government of India has decided to increase the basic custom duty by 20 percent. This increase has been made in crude and refined edible oils.
Why may prices increase
The thing to understand here is that the share of refined edible oil in the raw material of most FMCG companies is 12 to 20 percent. Companies still have 1 to 2 months of inventory so it seems natural for prices to increase. Experts also say that apart from palm oil, other import costs have also increased, which also includes the increase in wheat prices.
Crude and Refined Palm Oil Price Linkage
In a country like India, 95 percent of oil supply is through imports, so when input duty increases, it directly impacts many categories of products. Crude palm oil is an essential input used in laundry detergents, shampoos and cosmetics. Similarly, refined palm oil is most commonly used in biscuits, noodles and chocolate.
Reason for inflation in food business?
Speaking to Economic Times, Dabur Chief Executive Mohit Malhotra said that we feel that inflation may be seen in the second quarter of the year. Food inflation is continuously increasing, due to which the prices of some items in the food business may have to be increased.
