Expect your household budget to rise sharply as prices for essential items rise

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  • The inflation crisis in the country could worsen due to a shortage of supplies from countries like Russia, Ukraine, which are among the largest producers of sunflower oil, metals and wheat for India.
  • Individual transport costs could also increase as petrol and fuel prices could increase after the end of national elections next week.
  • Prices for milk and other consumer goods have risen in recent months.

From HUL, Marico, Britannia, Nestlé, everyone has been talking loud and clear for the past three months about soaring inflation that has led to steadily rising prices for household products like cookies, soaps, shampoo, oil, etc.

Unfortunately, the situation is getting worse as the prices of almost everything rise due to high input costs, which usually include the prices of fuel, liquefied petroleum gas (LPG), etc.

In fact, your household budget can only increase in the next few months. Indeed, the country would find it difficult to obtain an adequate supply of raw materials due to an all-out war between the two of the largest producers of these raw materials. So, naturally, less supply and high demand are likely to increase the price of these products.

The prices of sunflower oil, wheat, LPG, crude oil are directly impacted due to the ongoing battle between Russia and Ukraine. As a result, raw material costs have also increased for companies producing FMCG products.

Let’s look at the products whose price increase will impact your family budget:

Cooking oil


Cooking oil prices in all countries have soared on fears of supply disruptions in Russia and Ukraine. In fact, Ukraine and Russia together account for 90% of India’s sunflower oil imports.

Sunflower oil is one of the most widely consumed edible oils in India, alongside palm, soy and other alternatives. In fact, sunflower oil is the second most imported edible oil, right after palm oil.

The government has acknowledged the impact on the country’s imports due to geopolitical disputes. “We are quite seized with the issue in its granular form as it is going to impact essential products such as edible oils which come from Ukraine, sunflower oil and parts of fertilizers etc.,” reportedly said Finance Minister Nirmala Sitharaman.

In 2021, India imported 70% of its sunflower oil needs from Ukraine alone. Russia accounted for 20% and the balance 10% came from Argentina.

Milk

Due to rising input costs – energy, packaging, logistics and livestock feed, the cost of milk has also increased. Dairy companies like Amul, Parag, Verka raised milk prices by ₹2 citing rising input costs. According to data from Statista, India consumes about 83 million tons of milk every year, making it one of the most consumed products in the country.

Gas prices

Rising inflation will dig a deeper hole in consumers’ pockets as LPG prices also rise.

India covers more than half of its gas needs with imports of liquefied natural gas (LNG) from Ukraine. A small part of India’s LNG consumption is also met by imports from Russia.

Fuel

Gasoline and fuel prices will also rise after the end of national elections next week as crude oil prices surged above $100 a barrel. A regular overhaul of petrol, diesel and LPG cooking gas has been halted in five states, including Uttar Pradesh, due to ongoing parliamentary elections.

“With state elections ending next week, we expect every day fuel price the hikes to restart for both gasoline and diesel,” JP Morgan reportedly said in a report.

Crude oil prices have risen dramatically by 43% so far this year, mainly on fears of oil disruption by one of the biggest oil producers, Russia, after invading Ukraine .

Wheat

The cost of a very essential Indian product – wheat – has been rising worldwide. Russia is the largest exporter of wheat and Ukraine is among the four largest exporters of this product, according to a report by JP Morgan.

However, it could give India the opportunity to export more wheat to global and domestic markets.

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