Nestle India chief Suresh Narayanan said the company may be forced to hike rates of some of its products in 2022 due to rising raw material and commodity prices.
estle India Limited has hiked prices of its products due to rising prices of items like milk and coffee over the past six to eight months. Nestle has increased prices of some of its products by 1 per cent to 3 per cent, depending on rising costs.
At a recent press conference, Nestle India Chairman and MD Suresh Narayanan informed that there are “pressures” on raw materials as large economies around the globe are reopening strongly.
“The forward pressures are likely to be more acute than what we have been through at the moment,” Narayanan said.
He went on to say that items such as milk, coffee and packaging have seen a 4 per cent to 5 per cent rise in the wake of rising demand as economies continues to open up.
FOOD INFLATION TO RISE IN 2022
The Nestle India chief said the first half of 2021 was relatively more secured and subdued in terms of commodity prices besides the cost of packing materials and crude oil. He added that the price of milk and wheat have been stable.
“Going forward, 2022 clearly looks to be promising to be a difficult year,” he said.
“There is clearly an uptick as far as milk prices are concerned,” Narayanan told during the virtual conference. Not just milk, but global coffee prices are also going up “quite significantly’ due to the adverse impact of the pandemic on Vietnam, which is the largest producer of coffee.
“So, there is going to be the spectre of food inflation that will be staring at us,” he said. Though Nestle India mostly sources products for its raw materials locally, Narayanan said there will “definitely” be an impact and that is an area the company is watching out for.