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How common man is ‘paying the price’ for inflation

Be it atta, oil, eggs, milk or personal care products, companies are passing on the rising input and transportation costs to the consumers. Here’s a look at the food and FMCG products whose prices have risen substantially in the last one year.

July 16, 2021 / 01:43 PM IST
Representative image: Pixabay

Representative image: Pixabay

Skyrocketing prices have hit the consumer’s daily needs basket. The consumer now has to shell out considerably more to buy food as well as personal care products. In the food category, edible oil witnessed the highest rise in inflation in June, followed by pulses and eggs.

Soaring commodity prices, coupled with inflation in fuel prices, has resulted in costlier personal care products as FMCG companies pass on the rising cost to consumers.

According to Dipti Deshpande, Principal Economist, CRISIL, inflation continues to face pressure from high international commodity prices, including crude and edible oils. “Producers have been passing on the rise in input prices to consumers, which might continue if global prices persist at the current levels,” she added.

Food dearer

The increase in prices of commodities, such as palm oil, has affected several food products, besides the obvious edible oil, which has seen the steepest hike in the food portfolio so far.


Data from retail tech company Snapbizz shows that the price of Fortune’s 5 litre sunflower oil has risen from Rs 671 in March 2020 to Rs 1,067 in April 2021.

Other products in the food kitty, such as coffee, tea and wheat flour, too, have seen substantial price hikes since March 2020. (chart below)

High protein products, such as pulses and eggs, have also witnessed steep price hikes, of late. In June, according to Deshpande, inflation stood in double digits for key protein items such as pulses (10 percent in June versus 9.4 percent in May) and eggs (19.4 percent vs 15.2 percent).

Milk prices, which had been stable since December 2019, too, witnessed an increase in July as dairy cooperatives such as Amul and Mother Dairy raised prices, citing inflationary pressure, especially on account of soaring fuel prices.

A litre of Mother Dairy’s full cream milk will now cost Rs 57, instead of Rs 55. Products such as milk and eggs are bought daily by consumers and an increase in their prices puts a serious dent in household budgets.

“Liquid milk has a weightage of 6.4 percent in headline CPI inflation, which is significant in relation to the 45.9 percent contribution of the overall food and beverages segment, covering other 126 items,” said Sheetal Sharad, Vice President and Sector Head, ICRA Ltd.

“From January 2021 to June 2021, liquid milk retail prices have risen by 2.5 percent. “There is expected to be a sequential rise in the coming months, given the recent price increases by leading dairies,” warned Sharad.

Personal care items get costlier

From soaps to detergents, the entire personal care products basket has witnessed a price rise in the last one year, mostly on account of pricier palm oil derivatives, a key ingredient in soaps, shampoos, detergents and increased packaging and freight costs.

To offset the pressure on margins, several FMCG companies, such as HUL, Godrej Consumer, ITC and Marico, have passed on the price hike to consumers. As a result, a 100 gm pack of Lux soap, which used to cost Rs 22 in April last year, was priced at Rs 28 in May. Similarly, the price of Chik shampoo, which was Rs 89 last year, increased to Rs 99 this year. (Chart below)

Personal care segment gets costlier

Economists, however, indicate that the inflation in personal care product is abating as witnessed in June data.
Devika Singh
first published: Jul 16, 2021 01:43 pm
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