Palm Oil: Impact of crude palm oil, FMCG companies increase soap prices by 8 percent
New Delhi| Due to the increase in crude palm oil prices, daily consumption goods manufacturing (FMCG) companies have increased the prices of soap by 8 percent. Major companies like Hindustan Unilever (HUL) and Wipro have decided to put the burden on customers to reduce the increased cost of crude oil.
Abneesh Roy, Executive Director, Nuvama Institutional Equities, says that in the FMCG sector, usually one company increases the prices first, following which other companies also gradually increase the prices. On similar lines, after HUL and Wipro, now other companies can also increase the prices of soap soon.
HUL has increased the prices of brands like Dove, Lux, Lifebuoy, Lyril, Pearce, Rexona. Palm oil prices have increased rapidly with the increase in import duty. Palm oil is mainly imported from Indonesia and Malaysia. Currently the price of palm oil is around Rs 137 per kg.
The prices of palm oil, a key product used in making soap, have risen by 35 percent since early September, said Neeraj Khatri, chief executive officer of Wipro Consumer Care. For this reason, major companies have partially increased the price of soap by 7-8 percent.
During September, FMCG companies had hinted at a rise in soap prices to increase margins. He had to face increase in the prices of commodities like palm oil, coffee and cocoa. Tata Consumer had already increased the price of tea by 30 percent. The company said, increasing prices more at one go affects demand.
