Summary

Geopolitical tensions following the Russia-Ukraine conflict have set off a relentless rise in commodity prices, posing significant risks to both the Indian and the world economy.

From 0.7% in September 2021, food inflation has surged to 7.8% in May 2022.

Elevated agri-commodity prices are eating into the profits of consumer food companies. Raw materials account for about 65-70% of their total cost.

While the larger companies are trying to navigate past the price-fire, there is only so much the small and medium ones can bear.

Even if political tensions ease over the medium term, climate-change concerns loom large.

Rising temperatures, increasing carbon dioxide levels, frequent cyclones and erratic rainfall have become the order of the day — and will continue to affect commodity prices in the next 25 years, even with ongoing efforts to minimise climate change impacts.

Given that it has become crucial to examine the factors that will drive food prices in the coming quarters and their impact on the industry at large, CRISIL Research is hosting a webinar where our experts will make a presentation covering:

• How climate change is impacting agriculture production
• Price drivers across key commodities
• Outlook on prices of 5 key commodity categories crucial for the consumer food sector (Wheat and related products, sugar, edible oil, gram and related products, milk, Skimmed Milk Powder)
• Impact of the relentless price rise on various consumer food companies
• Sensitivity of industry profit margins to commodity price movements