FMCG products set to cost more if global pressures persist, hurting consumption

Subscribe to enjoy similar stories.MUMBAI: Indian FMCG products might get costlier on account of the war in West Asia as companies use up their buffer raw material stocks and shipments of key ingredients, including crude oil and oil-derived products, slow down because of global tensions, experts said.Persistent crude oil-linked inflation could keep companies cautious on pricing, margins and expansion plans. As inflationary pressures build, consumers are expected to cut back on discretionary spending and reduce shopping frequency.“People will start to look at value for money often.

So, some of this trading down will happen,” said Anand Ramanathan, partner, consumer industry leader, at Deloitte South Asia.A recent report by global consumer data and market research company Worldpanel by Numerator (formerly Kantar) lists out products such as hair oil, biscuits and jams that could be under pressure due to rising inflation, as well as categories such as chips and snacking, which are dependent on oil-linked inputs and logistics.Biscuit and candy makers will also be under scanner as major raw materials like wheat and sugar prices are on an upward trajectory. Quick service restaurant (QSR) companies may face stress from rising commercial LPG cost and falling discretionary consumption.Brent crude oil continues to hover at $90-$100 a barrel after the closure of the strategic Strait of Hormuz through which about a fifth of the world's oil and liquefied natural gas usually passes.According to K Ramakrishnan, MD, South Asia of Worldpanel, most macro assumptions for India’s 2026 outlook were built around crude oil prices averaging $80-85 per barrel.