Higher input costs impacting biscuit makers’ profitability: TPCI

New Delhi: Trade Promotion Council of India (TPCI) on Friday said that an increase in commodity prices especially wheat flour coupled with rising refined palm oil is eating into the margins of biscuit manufacturers in India.

“India’s biscuit manufacturing is going through turmoil and disruption on account of the increased input cost to the tune of 35-40%,” said Mohit Singla, TPCI chairman, adding that industry is unable to honour contracts on the agreed pricing, as the purchase price of raw material such as wheat, refined palm oil and sugar have shot up.

All three are the essential raw materials in the bakery industry and industry is becoming uncompetitive in the international market, he said.

India exported $181 million worth of biscuits in 2019 with the major destinations being the US, EU, Russia and African countries.

“The biggest worry is despite having a good harvest and sufficient stocks of wheat and sugar, prices are still shooting up. A slight rise the input cost can lead to the fear of shortage,” Singla said, adding that any wheat import would be below the Minimum Support Price creating further volatility and speculation in the industry.