Commodity prices are cooling off and rural demand is expected to pick up, ITC chairman and managing director (CMD) Sanjiv Puri said on Thursday.
The Puri-led diversified conglomerate has started doing climate risk modelling to mitigate extreme weather events.
“The risk of extreme weather events exist and so we have to be alive to that,” Puri told reporters on the sidelines of annual regional meeting and conference on ‘DIGITISE’, organised by industry body Confederation of Indian Industry (CII).
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Asked about commodity prices, he said: “I think firstly the worst is behind us. Commodity inflation is cooling off.”
He also said the wheat prices has come down. “The overall crop is also better than last year,” Puri added.
On the overall demand going forward, Puri said, “As far as the industry is concerned, we expect that rural (demand) should be better. Urban (demand), we would like to see it sustains at an industry level.”
Asked about the rural demand for FMCG products, he said, “I expect rural to pick up.”
Inflation topping the growth in rural wages had impacted FMCG companies for the first six months of the current fiscal.
FMCG makers are now expecting a decent rise in demand for products across categories this summer.
Rural markets account for nearly 40% of the FMCG industry’s volumes. The companies are now pinning hopes on recovery in rural markets on the back of monsoon, good harvests and better price realisation.
According to Puri, the effect of El Nino, if any, can only be understood in April-May.
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On the climate risk modelling, ITC is now piloting on agro value chains. After completing wheat and pulpwood, the conglomerate has started working for other crops such as potato, spices and rice among other.
The way to mitigate extreme weather conditions is to identify the “hotspots”, according to the company chairman.
“What we are trying to do is to do a climate risk modelling and identify hotspots. When the hotspots are identified, based on the nature of the problem you have to take the mitigating steps. It has to be very localised action that has to be taken. We did the first climate risk modelling in 2020 and that was more of a macro view of pan-India,” he said.
For areas that came out as being higher concern areas, the company is doing more detailed and granulated site-specific research.
Elaborating further on the aspects of climate and agriculture, Puri said ITC’s Climate Smart Agriculture programme aims to de-risk farmers from erratic weather events through the promotion of climate smart agriculture practices, focusing on high-yielding and climate-resilient varieties, adoption of appropriate mechanisation, reduction in stubble burning, and provision of institutional services.
The conglomerate’s Climate Smart Agriculture initiative has benefited over 590,000 farmers, covering over 1.8 million acre across 79 districts in 17 states.