Inflation a cause of worry for FMCG companies; margins could take a hit

While companies remain cautiously optimistic about demand panning out this year, a dry August has already played spoilsport for demand, especially in rural areas

Higher inflation has again become a matter of concern for fast-moving consumer goods (FMCG) companies.  

After prices of commodities like sugar and wheat moved higher and stabilised at those levels, the crude oil too surged, adding to FMCG firms’ worries. Brent crude was trading at $92.87 a barrel at 9.20 pm IST.  

Besides, a dry spell in August in the ongoing monsoon season impacted rural demand. But FMCG companies are cautiously optimistic about demand picking up following a revival in monsoon rainfall and ahead of the festival season. 

“Inflation has been high since 2021, but crude oil going up now