Commodity inflation to fall, outlook appears positive in coming quarters

Commodity inflation, which impacted volume growth in the last few quarters, is coming down as prices are stabilising but the upcoming quarters should see things returning to normal, the company's outgoing India Chairman & Managing Director Suresh Narayanan said on Thursday.

However, commodities like coffee, cocoa remain at "decadal highs and that clearly puts an enormous amount of pressure in terms of managing the penetration-led growth and the bottom line (margins) of the company," said Narayanan, while addressing his last Annual General Meeting (AGM) for Nestle India.

Going forward, Nestle will not like to go for price increases wherever it can, however, it will also depend on the commodity prices, as coffee, which is up 60-70 per cent and is "very difficult to manage", he said, adding that overall the outlook is "a bit more positive" in the upcoming quarters.