Impact of Duty Cut on Edible Oils: A Boon for FMCG Companies
The reduction in import duty on edible oils, such as palm, soya, and sunflower, is expected to improve FMCG companies' margins by stabilizing input costs. This move could also help control consumer inflation. Food and soap manufacturers stand to benefit significantly, maintaining competitive pricing without further price hikes.
- Country:
- India
In a strategic move to curb rising food prices and stabilize the cost of essential inputs for FMCG companies, the government has slashed the import duty on crude edible oils by 10 percent. This decision is anticipated to help companies like Godrej Consumer Products Ltd and Parle Products maintain competitive pricing.
Experts highlight that the reduction will alleviate pressure on FMCG companies' margins caused by previous hikes in palm oil prices, a key ingredient in products ranging from food to soaps. The stabilization of input costs is expected to mitigate consumer inflation without transferring additional costs to customers.
This policy adjustment is especially advantageous for companies in the food sector, such as Britannia, Nestle, ITC, and more, aiding them in balancing volumes and profits while also benefiting from the cooling prices of palm oil derivatives and related byproducts.
(With inputs from agencies.)
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