FMCG raw material costs a mixed bag; cereals prices softens but coffee remains firm: Report

Volatility persists in edible oils, the report said

Raw materials costs for FMCG companies have been a mixed bag. While cereal-linked agri inputs have witnessed signs of easing, beverage-related inputs such as coffee prices remained firm but tea and cocoa remained subdued, per a report released by Equirius Securities that analysed FMCG raw material costs.

The report noted that wheat and rice prices remained broadly stable q-on-q, with year-on-year decline of 10 per cent and 1 per cent in terms of prices, respectively. Maize continued to correct meaningfully, down 14 per cent y-o-y in September quarter, barley posted a 4 per cent year-on-year drop. However, sugar moved counter to the broader trend, rising 8 per cent y-o-y on output constraints.

In terms of beverages related inputs, coffee priced remained firm with Arabica prices surged 18 per cent q-o-q and 46 per cent year-on-year, largely driven by supply disruptions across major origins. Robusta prices too were up 15 per cent q-on–q. However cocoa extended its correction phase, down 8 per cent month-on-month and 26 per cent quarter-on-quarter. Tea prices too remained subdued down nearly 4 per cent year-on-year.

edible oil, crude oil

Noting that volatility persists in edible oils, the report said, “Copra remained elevated on a y-o-y basis, up 60 per cent, owing to production disturbances and festival-season demand, though prices have eased from peak levels. Palm oil edged up 2 per cent q-o-q while mustard, sunflower, and soybean oils stayed firm, with yoy increases of 13 per cent, 11 per cent and 6 per cent respectively. “Meanwhile, milk prices have begun to soften with the onset of flush season as that leads to improvement in supply across key producing belts, while SMP has also begun showing early signs of easing.

It added that further softening of crude oil will aid in lower packaging costs for FMCG companies.

“Gradual easing in key cereals is constructive for Britannia, Nestlé India, Mrs. Bectors Food Specialities, United Breweries, Tata Consumer Products and ITC. Softer milk and SMP trends support margin recovery for Nestlé India, Zydus Wellness, Britannia Industries, Tata Consumer Products, and HUL. Correction in palm oil and PFAD remains an important monitorable for players exposed to edible-oil volatility. A softening crude and polymer basket is favourable for home and personal care companies including Godrej Consumer, Hindustan Unilever, Jyothy Labs, Dabur — and the wider FMCG universe due to easing packaging costs,” the report noted.

Published on December 3, 2025