Archive · 2 Sep 2026
Rising Sugar, Crude Oil and Copra Reshape Consumer Company Margins
Companies that make food, household goods and paints need raw materials to make their products.
In August, sugar, crude oil and copra became more expensive.
This means some companies may earn less money on each product unless they raise prices.
Many companies already raised prices, but those increases were smaller than the rise in their costs.
Nomura expects FMCG profit margins to remain under pressure in the September quarter.
The situation may improve from the December quarter as earlier price increases affect more sales.
Some materials, such as coffee and tea, became cheaper and may help certain companies.
Marico may benefit because copra is still much cheaper than it was last year.
Nomura’s preferred companies include Marico, Tata Consumer Products, Titan and United Spirits.
Sugar, crude oil and copra prices rose in August, increasing cost pressure for consumer companies.
FMCG margins are expected to remain under pressure in the September quarter as earlier price hikes lagged input inflation.
Britannia, Nestlé and paint companies face pressure from higher sugar, packaging and other raw-material costs.
Lower copra prices than a year ago could support Marico’s margins, while moderating coffee and tea prices offer relief to some companies.
Nomura’s top picks are Marico, Tata Consumer Products, Titan and United Spirits, all rated Buy.
- Who
- India’s FMCG, personal-care, paint and consumer companies, as assessed by Nomura.
- What
- Higher sugar, crude oil and copra prices are expected to affect company input costs and profit margins.
- When
- The cost movements occurred mainly in August; margin pressure is expected in the September quarter and may ease from the December quarter.
- Where
- India.
- Why
- Input-cost inflation has outpaced companies’ price increases, while some raw materials and packaging inputs have become more expensive.
Rising-cost pressures
Falling or stable-cost relief
FMCG margins
Rising-cost pressures
Higher sugar, crude derivatives and packaging costs are expected to pressure margins because earlier price hikes lagged input inflation.
Falling or stable-cost relief
Margins could improve from the December quarter as the full effect of earlier price increases flows through company results.
Raw-material exposure
Rising-cost pressures
Britannia and Nestlé face higher sugar and packaging costs; paint companies face crude-related and other input-cost pressure.
Falling or stable-cost relief
Marico may retain margin support because copra remains well below its year-ago level, while lower coffee and tea prices may help Nestlé, Hindustan Unilever and Tata Consumer Products.
Consumer demand and pricing
Rising-cost pressures
Further price increases can weigh on demand, and high gold prices have previously increased jewellers’ need for promotions.
Falling or stable-cost relief
Softer gold prices may restore jewellery footfalls and reduce promotional spending, while higher copra prices remove the immediate need for further price cuts.
- Sugar prices
- Up 16% month-on-month and 18% year-on-year in August.
- Brent crude
- Up 10% month-on-month, according to the Nomura report.
- HDPE prices
- Up 3% month-on-month, with year-on-year increases as high as 42%.
- Copra prices
- Up 14% month-on-month and 10% quarter-on-quarter in August, but down 33% year-on-year.
- FMCG outlook
- Margins are expected to remain under pressure in the September quarter and improve from the December quarter.
- Paint companies
- A weak spot for the September quarter because cost increases outpaced their 12% June-quarter price hikes.
- Nomura top picks
- Marico, Tata Consumer Products, Titan and United Spirits, all rated Buy.