Nestle India chief Suresh Narayanan said that 2022 will likely be a "difficult year" as commodity prices are expected to rise and result in the spectre of food inflation for the manufacturers.
Nestle India chief Suresh Narayanan on Monday said that 2022 will likely be a "difficult year" as commodity prices are expected to rise and result in the spectre of food inflation for the manufacturers.
The leading FMCG player, well known for household brand names like Maggi and Milkybar, is anticipating an escalation in the prices of raw material inputs, including milk, coffee, cocoa and oil prices.
In the last six to eight months, Narayanan said Nestle has seen an average price hike of 1-3 per cent.
According to him, the first half of 2021 was relatively more secured and subdued in terms of commodity pricing as except packing materials and crude oil, by and large, prices of milk and wheat have been broadly stable.
"Going forward, 2022 clearly looks to be promising to be a difficult year. There is clearly an uptick as far as milk prices are concerned," Narayanan told reporters during a virtual media roundtable.
Apart from disruptions caused by the coronavirus pandemic and non-replacement of milch herd on-time across the country has also resulted in a depleted supply base.
Similarly, globally coffee prices are also going up "quite significantly" as there have been adverse impacts in Vietnam, which is the largest grower of coffee, due to the pandemic and disruptions there, Narayanan said.
"So, there is going to be the spectre of food inflation that will be staring at us," he said, adding that there will put pressure on raw material supplies going forward as large economies are opening up quite strongly.
Globally, there is around 5 per cent of uptick in commodity prices, he added.
"I think, the forward pressures are likely to be more acute than what we have been through at the moment," he said
No comments:
Post a Comment