The ongoing war in West Asia has pushed up the prices of edible oil and packaged drinking water as commodity costs surge. While packaged drinking water is directly impacted by the war as the cost of plastic packaging, a crude-linked derivative, has significantly increased, vegetable oils tend to follow crude prices, commodity experts said.
According to FMCG dealers and distributors whom FE spoke to, the price of bottled water leader Bisleri has increased by `2 to Rs 20 for a one-litre pack. A two-litre pack of Bisleri now costs Rs 30 compared with Rs 27 earlier and a 500-ml pack Rs 10 compared with Rs 9 earlier. The latest price hike has effectively negated the benefit of GST rate cuts, trade sources said. The price of a 200-ml pack of Bisleri has been retained at Rs 5, they said, to avoid hurting in-transit consumption. Executives at Bisleri International were not immediately available for comment.
Beyond the Bottle
Popular edible oil brands such as Fortune from AWL Agri Business, the market leader in the category, has seen a Rs 20 increase on an 800-gm pack of refined sunflower oil to Rs 180, according to trade sources. Palm oil prices too have surged by about 4-5% in the last few weeks, prompting dealers to be alert for possible increases in categories such as soaps, which use palm oil as an input. Price hikes are likely in detergents, toothpastes, hair oils, creams and shampoos too, as these use petroleum derivatives as inputs, experts said.
“So far, bottled water and edible oil are the first set of FMCG products to see price hikes. But the list will grow as we anticipate further hikes in April, if this war drags on,” Dharyashil Patil, national president, All India Consumer Products Distributors Federation, an apex body of FMCG distributors, said.
April Deadline
Paint majors too have signaled the need for a price hike if crude prices continue to rally. The paints industry uses titanium dioxide, solvents, binders and resins, all crude-linked derivatives, which constitute around 55-60% of their input costs, experts said.
Berger Paints MD & CEO Abhijit Roy said that most paint companies maintain raw material inventory of about a month. Finished goods inventory manufactured at previous prices are also maintained for about 30-45 days. “So, in the immediate term, there will not be a price hike since companies are sufficiently stocked for now. However, if the war drags on, then price hikes may have to be considered,” he said.
Analysts at brokerage Systematix said that paint prices could rise by 2-5% in April, if the price of crude sustained at current levels. “Dealers anticipate price hikes if crude remains volatile. While companies have not indicated any price hikes so far and may wait until the end of March 2026 for crude to stabilise, the situation remains fluid,” analysts Abhishek Mathur and Rajat Parab from Systematix said.
In a recent call with analysts, Asian Paints MD & CEO Amit Syngle said that the company was keeping a close watch on titanium dioxide in view of the heightened volatility in the Gulf region. “The whole price environment seems volatile today. With the current geopolitical situation, the crude impact could come in fast,” he said.