Because of the rise in crude palm oil prices, FMCG companies have raised soap prices by as much as 8 percent. Major companies such as Hindustan Unilever (HUL) and Wipro have opted to transfer the expense of crude oil to consumers in order to alleviate their own financial strain.
According to Abnish Roy, who is the Executive Director of Nuvama Institutional Equities, it is usual for one company to raise prices initially in the FMCG industry, with other companies subsequently following suit with gradual price hikes. Similarly, following in the footsteps of HUL and Wipro, other companies might also raise soap prices in the near future. Prices of brands such as Dove, Lux, Lifebuoy, Liril, Pears, and Rexona have been raised by HUL. Due to the rise in import duty, the cost of palm oil has surged quickly. The primary sources of palm oil importation are Indonesia and Malaysia. At the moment, the cost of palm oil stands at approximately Rs 137 per kilogram.
CEO of Wipro Consumer Care said
Neeraj Khatri, CEO of Wipro Consumer Care, mentioned that the cost of palm oil, a key ingredient in soap production, has risen by 35 percent since the start of September. Because of this, large corporations have raised soap prices by 7-8 percent.
Price of tea had already been raised
In September, FMCG companies had suggested an increase in soap prices in order to improve profits due to higher commodity prices like palm oil, coffee, and cocoa. The price of tea had already been raised by Tata Consumer by 30 percent. The company stated that a significant increase in price at once has a negative impact on demand.