Consumer goods producers predict that over the next six months, the cost of food, clothing, and other necessities will decrease as input costs fall, which will increase demand.
Input cost pressure is expected to ease in the following two quarters, according to fast-moving consumer goods (FMCG) companies Hindustan Unilever, Britannia, ITC, Marico, and Emami which just reported their earnings. The businesses said that they would pass on the advantages of lower input costs to customers by lowering prices, increasing pack weights, or launching consumer promotions. Over the previous few weeks, commodity prices have significantly decreased.
It’s also good news for the fashion and textile businesses since input costs are declining; cotton prices have dropped 30% in the last four to six weeks, reducing concerns about inflation.
Lalit Agarwal, general director of value apparel retailer VMart Retail, recently disclosed to analysts that cotton costs had dropped 30% in the previous 1.5 months despite remaining above pre-Covid levels. While the company has already reduced the price of the current autumn-winter line, he said that prices for clothing will be further decreased for the upcoming spring-summer season.
Once the input costs are reduced, the other retail companies, besides Vmart, will also lower the prices of garments.
Aside from clothing, the cost of necessities like edible oil and electronics will reduce as a result of lower input prices, which will enable producers to give customers more advantages.