New Delhi: A decline in key commodity prices and the slowing pace of inflation notwithstanding, consumer products ranging from detergents to tea and juices have become more expensive, as companies attempt to earn higher margins.
Recession impact: Oil palm fruit being loaded for processing in Bidor, Malaysia. The price of the commodity has declined on low demand. Goh Seng Chong / Bloomberg
Firms such as Procter and Gamble India Ltd (P&G), Hindustan Unilever Ltd (HUL), Dabur India Ltd and Tata Tea Ltd have increased some product prices in the range of 3-13% recently.
According to a Delhi-based HUL distributor, who did not want to be named, the company has increased the prices of fabric cleaners, with a one-kg pack of Rin now costing Rs60 against Rs54 a month ago. At Rs22, a one-kg pack of dishwashing product Vim Popular is up from Rs21.
“We do not get any prior information from the company, and we get to know about the hikes only when we replenish our stocks,” the distributor said.
HUL has also increased the price of Brooke Bond tea. A 250-gram pack that earlier sold for Rs58 now costs Rs66. The price of Tata Tea’s 250-gram pack has risen by Rs7 to Rs60, said a retailer in Noida on New Delhi’s outskirts, who also didn’t want to be named.
P&G has increased the prices of some of its products. A 950-gram pack of Tide detergent has a new maximum retail price of Rs64, up from Rs60, while a 200-ml bottle of Pantene shampoo costs Rs109, up from Rs99 earlier.
Dabur has increased the prices of some of its juice variants, with the price of a one-litre pack rising to Rs75 from Rs72.
Prices of commodities such as palm oil that go into the making of home and personal care products have declined sharply as global recession cut demand. The Reuters-Jefferies CRB index, which tracks prices of futures across 19 mostly US-traded commodity markets, has lost nearly 40% this year, its biggest annual decline.
“Though commodity inflation has come down in the last few months, there is always lag” before consumer-product prices decline, said Anand Shah, an analyst at Mumbai-based Angel Broking Ltd.
“Companies which are category leaders do not mind taking price hikes now as demand is not getting affected. Also it helps them expand margins,” Shah said.