Snack prices are feeling the impact of rising palm oil and potato costs, pushing many packaged food products to become more expensive. While domestic supply issues have caused potato prices to spike, global disruptions and increased import duties have made palm oil—a key ingredient in many snacks—costlier. As of recent reports, palm oil prices have hit their highest in over two years, with an all-India average price of Rs 130.5 per kg.

Snack manufacturers, including Bikaji Foods, are adjusting prices to cope with these rising costs. The company has already raised prices by 2-3% and plans to implement another round of price hikes in the next quarter. Palm oil, which accounts for around 28% of Bikaji's cost, has risen by over 25% in less than a year. Other companies like Gopal Snacks are also reducing product sizes, or de-gramming, as part of their efforts to maintain margins.

The inflationary pressures on raw materials, combined with a sluggish economy, have slowed consumption, especially in metropolitan areas. Although some relief is expected in the coming months, with food inflation showing signs of easing, the next two quarters are anticipated to remain challenging for snack companies. The Reserve Bank of India has also projected that food inflation could soften due to seasonal price changes and better conditions for agricultural production.