New Delhi: Fast-Moving Consumer Goods (FMCG) companies in India are expected to see improved profit margins in the first quarter of FY26, owing to a broad-based reduction in the prices of key agricultural and packaging commodities, according to Antique Stock Broking Limited.
Several key inputs' pricing have decreased, which might benefit major firms. In Q1FY26, the majority of agricommodity prices decreased compared to Q4FY25.
This trend indicates a slowdown in year-on-year (YoY) inflation and provides relief to FMCG producers, who have been dealing with rising input costs in recent quarters.
Wheat, a key raw material for various FMCG brands, experienced a 13% price correction on a quarter-on-quarter (QoQ) basis. Barley prices fell by 13% QoQ as well, but were still 10% higher YoY.
A significant drop in palm oil prices, which fell 16% quarter on quarter, was especially noteworthy given that the government lowered import taxes on the commodity by 10% at the end of May 2025.
This move is anticipated to place additional downward pressure on prices in the near term.
Packaging costs also decreased during the quarter. High-Density Polyethylene (HDPE), which is widely utilized in packaging, stayed soft. Crude-based packaging inputs saw just a limited 3% rise in pricing, which is manageable for most firms.
Dairy supplies such as Skimmed Milk Powder (SMP) and liquid milk, which saw increases of 4% and 1% quarter-over-quarter (QoQ), respectively, suggest a consistent pricing trend in dairy, which is essential for food and beverage producers.
Not all commodities exhibited this deflationary tendency, however. Copra, a vital ingredient for coconut-based goods and edible oils, stood out.
Overall, aside from dairy and certain inputs like copra and LLP,, the majority of commodity prices fell by 2% to 14%.
This downward trend is projected to result in substantial cost savings for FMCG companies, enabling them to either maintain margins or pass on benefits to customers in the form of price decreases.
