Latest News | Russia-Ukraine Conflict: India Inc Frets over Spiking Crude, Input Costs

New Delhi, Feb 24 (PTI) Industry leaders on Thursday said the Russia-Ukraine conflict may lead to a spurt in crude oil and commodity prices, which will raise their input costs and further stoke inflationary pressures.

Biscuits and confectionery maker Parle Products said the geopolitical situation is going to have a huge effect on crude oil prices and impact several industries as trade costs are bound to rise.

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"For the previous 7-8 years it (crude oil) had been below 100 dollars but today it has crossed the 100 dollar mark, impacting several industries in addition to the food industry.

"For instance, formalin oil, RBD oil will see a hike in price. Price hikes will have a huge impact on most of our products," said Krishnarao Buddha, Senior Category Head at Parle Products.

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In addition, vegetable oil, which is used in several FMCG products like anti-caking agents and soaps will also experience inflation, he said.

Rise in input costs directly or indirectly will cause brands to hike prices, stressing the bottom line. It might be partially absorbed by companies and then passed on to consumers or may be passed on directly, Buddha added.

India is already witnessing price rise and with the current situation, trade costs are bound to increase across all industries, seeping down to items of daily utility, he noted.

Usha International CEO Dinesh Chhabra said if the situation escalates further, it is likely to have a grave impact on economies worldwide and by extension their financial stability, India included.

"With the geopolitical stand-off between Russia and Ukraine escalating, it could mean a major crisis across the globe which is a matter of concern for us as a corporate and for our industry, especially since we were just about gearing up to shake off the stunting impact of the pandemic," he said.

The surge in crude oil prices and the prospect of a recession in Europe are likely to lead to an increase in import costs. Given that Ukraine is a major source of minerals like copper, it could also result in scarcity of these minerals, leading to rising mineral cost, Chhabra said.

STIC Travel Group said the Ukraine International Airlines (UIA) is working to facilitate the evacuation of Indians from Ukraine.

"Our UIA India team is working round the clock to facilitate the evacuation. We have been servicing this route for a long time and are trying our best to work with all the student specialists, travel agents, universities, and colleges, in addition to official channels, to ensure all Indians wanting to return have access to UIA flights," said Isha Goyal, CEO, STIC Travel Group.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)