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Key Points

Falling wheat and palm oil prices could lift FMCG profits after quarters of high input costs. Agri-commodities dropped 2-14% QoQ, with palm oil plunging 16% after import duty cuts. Packaging costs remained stable, though dairy saw slight increases. Analysts expect firms to either protect margins or pass savings to consumers.

Key Points: FMCG Firms to Gain as Wheat Palm Oil Prices Drop 13-16%

  • Agri-commodity prices ease after high inflation
  • Palm oil drops 16% post import duty cut
  • Packaging costs stabilize with HDPE softening
  • Dairy inputs see modest 1-4% rise
2 min read

Falling commodity prices expected to boost profits of FMCG companies: Report

Falling wheat, palm oil, and packaging costs may boost FMCG profits in Q1FY26, says Antique Stock Broking report.

"Wheat prices corrected 13% QoQ while palm oil plunged 16%—key relief for FMCG margins – Antique Stock Broking"

New Delhi, June 25

Fast-Moving Consumer Goods (FMCG) companies in India are likely to see an improvement in their profit margins in the first quarter of FY26, which is attributed to a broad-based decline in the prices of key agricultural and packaging commodities, according to a report by Antique Stock Broking Limited.

Prices of several essential inputs have eased, which could benefit major players. During Q1FY26, most agri-commodity prices fell when compared to Q4FY25.

This trend points to a moderation in year-on-year (YoY) inflation and offers relief to FMCG manufacturers, who have been grappling with high input costs over the past few quarters.

Wheat, a staple raw material for several FMCG products, saw a price correction of 13 per cent on a quarter-on-quarter (QoQ) basis. Barley prices also dropped by 13 per cent QoQ, although they were still up 10 per cent YoY.

A sharp decline in palm oil prices -- down 16 per cent QoQ -- was particularly notable, especially after the government reduced import duties on the product by 10 per cent at the end of May 2025.

This move is expected to bring further downward pressure on prices in the near term.Packaging costs also trended lower during the quarter. High-Density Polyethylene (HDPE), used extensively in packaging, remained soft. Crude-based packaging inputs witnessed only a marginal 3 per cent increase in prices, a manageable rise for most companies.

Among dairy inputs, Skimmed Milk Powder (SMP) rose slightly by 4 per cent QoQ, and liquid milk increased by just 1 per cent QoQ, marking a relatively stable pricing trend in dairy, which is crucial for food and beverage manufacturers.

However, not all commodities followed this deflationary trend. Copra, a key input for coconut-based products and edible oils, emerged as an outlier.

Overall, except for dairy and select inputs like copra and LLP, most commodity prices declined in the range of 2 per cent to 14 per cent. This downward trend is expected to provide significant cost savings for FMCG firms, allowing them to either protect their margins or pass on benefits to consumers in the form of price reductions.

- ANI

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Reader Comments

R
Rajesh K.
Finally some good news for consumers! FMCG companies should pass on these cost benefits to us through price cuts. We've suffered enough with inflation in past years. Time for some relief 🇮🇳
P
Priya M.
The reduction in palm oil prices is especially welcome. Many Indian households use it for cooking daily. Hope companies like HUL and ITC reduce prices of edible oils and packaged foods soon.
A
Amit S.
While lower costs are good, I'm skeptical if companies will actually reduce MRPs. More likely they'll just increase their profit margins quietly. We need government monitoring to ensure benefits reach common people.
S
Sunita R.
As someone from Kerala where coconut products are essential, the copra price increase is worrying. Hope the government intervenes to stabilize these prices too. Our local small businesses are suffering.
V
Vikram J.
This is positive for stock market investors! FMCG stocks might see good growth in coming quarters. Time to review my portfolio with these commodity trends in mind. 📈
N
Neha P.
The stable dairy prices are crucial. So many Indian products from biscuits to sweets depend on milk. Hope companies use these savings to improve product quality rather than just cutting costs.

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