PremiumNEW DELHI: Packaged consumer goods makers continued to hike prices of soaps, edible oils, detergents, shampoos, toothpastes and some packaged foods in the month of August to offset higher commodity prices, Kotak Institutional Equities said in a research report.
Companies have been dealing with higher input costs over the past one year. While, price hikes were taken in the March and June quarter, some companies have continued to raise prices of select stock keeping units or SKUs in the current quarter as they take a more measured approach to passing on costs to consumers.
For instance, India's largest packaged consumer goods company—Hindustan Unilever took price hikes on select units of Dove, Hamam, Lifebuoy and Lux soaps. P&G raised prices of Tide Plus detergent, while Mumbai-based Godrej Consumer Products Ltd (GCPL) took a price hike in its Cinthol soap portfolio.
“We saw continued price hikes in soaps led by inflation in palm oil and Palm Fatty Acid Distillate. Hindustan Unilever Ltd (HUL) has raised price of select SKUs of Dove, Hamam, Lifebuoy and Lux soaps by 5-15%. GCPL has raised price of Cinthol and Godrej No.1 soaps by 5-7%. In detergents, HUL has increased prices by 2-4% in select SKUs of Wheel and Surf Excel, while P&G has raised price of select SKUs of Tide Plus by 5%," the report said.
Product price comparison is versus June 2021 price levels, the report said.
The move comes amid volatile global commodity prices. Crude was up 2% month-on-month (m-o-m) and 74% year-on-year (y-o-y), said analysts at Kotak Institutional Equities. Meanwhile, domestic tea prices were stable month-on-month. Wheat price was down 8% m-o-m and 18% y-o-y. Barley prices were stable m-o-m. Milk price moderated 2% m-o-m. Maize prices declined 5% in the same period.
Companies are expecting the inflationary cycle to improve by the next quarter, Mint reported earlier.
Meanwhile, palm oil prices have moderated. “Over the past three months, palm oil prices moderated 9% while Palm Fatty Acid Distillate (PFAD) rose 2%, LLP rose 2%, sunflower oil moderated 20% and groundnut oil moderated 12%. Copra and coconut oils saw 13% mom moderation in prices," the report said.
Companies also took price hikes in toilet cleaners, shampoos and toothpaste. Selective price increases were also seen in face creams, body lotions and hair oils.
In foods—edible oil prices continue to remain “volatile". As a result, over the past six months, most edible oil companies have raised prices by 40-70%, according to the report.
“In tea, we saw 3-4% price increase in select SKUs of Red Label and Taj Mahal... Selective price increases were also seen in dairy products, soft drinks, baby foods, biscuits and chocolates," the report said.
