even as global commodity prices Now seeing a decline amid fears of a slowdown, prices of refrigerators, ACs, microwaves and washing machines may soon come down as companies look to pass on the benefits of the fall in input costs. Companies recently raised prices on various products due to increase in their input cost on expensive raw materials.
After touching a peak this year after the Russo-Ukraine war, copper is now 21 per cent cheaper and steel is down 19 per cent and aluminum prices are down 36 per cent from April’s levels this year, according to a recent report by brokerage firm ICICI. . securities. Margins of companies will also increase due to fall in commodity prices. The growth will also help in controlling the overall inflation.
“With the improvement in input prices, the need to raise prices has reduced. We believe a respite was necessary given that sustainable companies have consistently raised prices over the past two years. The cumulative price growth in the last two years was over 20 per cent,” said ICICI Securities.
It also said that the increased margins will prompt manufacturers of ACs, refrigerators, microwaves and washing machines to increase their advertising efforts and offer better discounts to customers. The case for the customer strengthens as these developments tend to come in the second half of the year, with the festive season just a few months away.
“We do not model sustainable companies by pocketing all the profits and expect them to invest the profits,” the ICICI report said.
Since the Russia-Ukraine war began in late February, the global economy has been grappling with multi-decade high inflation and slowing growth, persistent geopolitical tensions and sanctions, and high prices of crude oil and other commodities. However, now the prices of crude oil and other commodities are seeing a softening.
According to the Monetary Policy Committee Minutes of the June 2022 meeting, “The tense global geopolitical situation and consequently elevated commodity prices provide considerable uncertainty for the outlook for domestic inflation. Restrictions on wheat exports should improve domestic supply.” But reduction in rabi production due to heat wave could be a risky risk.The forecast of normal southwest monsoon augurs well for kharif agricultural production and food price outlook.
It said some commodities – such as metals and fertilisers – have seen some moderation in prices, with most food and all energy prices remaining high.
in retail inflation India It stood at 7.04 percent in May, the latest data available so far. Though the inflation rate of 7.04 per cent is lower than the 7.79 per cent recorded in April, it is still beyond the RBI’s comfort limit of 2-6 per cent.
To rein in inflation, the Reserve Bank of India (RBI) raised the key repo rate by 50 basis points (bps) in early June. This was the second hike in nearly a month after the off-cycle policy review by the RBI’s Monetary Policy Committee in early May raised 40 basis points.
read all breaking news, today’s fresh newswatch top videos And live TV Here.