The ongoing war in the Middle East will affect the prices of everyday items. These include soap, oil, biscuits, etc. FMCG companies state that raw materials may become expensive due to the war.
As a result, the Production cost of goods will skyrocket, making them expensive. Due to this, the company may face losses. They may also have to increase the prices of their goods. If this is carried out, common people will have to pay more for everyday things.
Due to increasing tension in the Middle East, Krishna Khatwani of Godrej Consumer Products said that the prices of crude oil may increase. Godrej Company manufactures Cinthol soap and Goodnight mosquito repellent.
He further said that this may make it difficult for people to buy things.This war in the Middle East started at a time when companies making consumer goods felt that now the demand will increase. Demand was low for the last five quarters. But, the Reserve Bank of India reduced the interest rates. The government gave tax relief in the budget. The monsoon also came early. Due to all these reasons, companies felt that things will get better.
Mohit Malhotra, Chief Executive of Dabur, the company that makes Real Juice, said that they are keeping an eye on the situation in West Asia. He said that retail food inflation is at a seven-month low.
This year, the monsoon is also expected to be good. The government has also taken some fiscal stimulus measures. Therefore, the industry was expecting that the demand for everyday items would increase.
Bisleri International Chief Executive Angelo George said that disruptions in the energy infrastructure of the Middle East could reduce oil supply. Bisleri is a water bottle manufacturer. He further said that this could increase the prices of packaging items made from crude oil. This will cause problems for companies that are heavily dependent on plastic.
Two weeks ago, Bisleri partnered with a Dubai-based retail chain. Through this, Bisleri will manufacture, sell, and distribute its products in West Asia and Africa. The beginning will be from the UAE.
Companies buy things in advance for at least six months. But, if there is any interruption in the price of oil, then the relief that companies were expecting may end. Especially in urban markets, where there has been a slowdown for a long time.
