FMCG products can be expensive.
Hindustan Unilever CEO Sanjiv Mehta said that due to the boom in palm oil and crude oil, the FMCG products category will see further growth. As long as the price of the commodity does not come down, inflationary pressure will remain.
Sanjeev Mehta, Managing Director and CEO of Hindustan Unilever (HUL CEO Sanjeev Mehta) pointed out that fast moving consumer goods ,FMCG ProductsIn the coming time in the industry, there will be more inflation and the goods of need will become expensive. In a conversation with Money Control, Mehta said that when there is no relief in the commodity, inflationary pressure will remain. He said that the rise in palm oil and crude oil is having a very bad effect on inflation. The margins of companies are also being affected due to inflation. Palm oil is used extensively in the FMCG industry. It is used in dozens of products ranging from deodorant, shampoo, toothpaste, lipstick, chocolate, animal feed to biofuel. The impact of the ban on exports will be serious on behalf of Indonesia, the world’s largest palm oil exporter.
FMCG companies are facing the brunt of inflation due to the boom in commodities. Due to this the margins of FMCG companies have also come down. In the fourth quarter, HUL’s gross margin declined by 3.31 percent. Mehta said that the biggest impact has been on skin cleansing products like toilet soap, surf. This segment has been affected the most due to the rise in palm oil. The boom in toilet soap is due to the boom in palm oil and the surge in surf is due to the rise in crude oil.
Economy should not fall in the grip of stagflation
Talking to Economic Times, Sanjiv Mehta said that the government should ensure that the country’s economy does not fall into the lap of stagflation. In stagflation, the rate of growth decreases, while inflation increases. During this time the problem of unemployment also starts getting terrifying. To avoid this situation, Mehta has suggested the government to implement the Capital Expenditure Plan at maximum speed. In the budget 2022-23, the government has set a capital expenditure target of 7.5 lakh crore. He has insisted on paying maximum expenditure in the beginning.
Growth is not visible due to inflation
Here Uday Kotak, Chief Executive of Kotak Mahindra Bank said that inflation is increasing very fast, which is necessary to control. Uday Kotak suggests that the Reserve Bank of India should focus attention here as soon as possible, because due to inflation, households are being badly affected. Whatever improvement is happening in economic activities, it is going in the grip of inflation.
Now the focus of the Reserve Bank should be on inflation
In April, the Reserve Bank had also said that inflation is increasing very fast. For three consecutive months, inflation is beyond the Reserve Bank’s upper limit of 6 per cent. In March, it had reached a 17-month high. After the meeting of the Monetary Policy Committee, Governor Shaktikanta Das had said that now the focus of the Central Bank is on rising inflation instead of growth.