Fast-moving consumer goods (FMCG) firms are set to gain from a decline in palm oil and other commodity prices.
However, consumers will have to wait a little longer for prices to come down since companies have ruled out cutting prices of their products, atleast for now.
According to a report by IIFL Institutional Equities, personal-care firms, including Emami, Godrej Consumer and Marico, are likely to benefit the most.
Import prices of palmolein — a key ingredient in many FMCG products — have gone down to R54,400 per tonne as on on June 24 from Rs 57,500 per tonne on May 11, 2011. Companies, however, said there was no scope of passing the benefit to consumers.
“Price cuts are not at all likely as we had not taken up prices in line with the highest raw material prices,” said Adi Godrej, chairman, Godrej Consumer Products.
Similarly Dabur, which sells personal care products and hair oils, said it will not reduce prices of its products as the usage of palm oil in its products were limited.