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Business

Rural Income Stress Cloud Over FMCG Demand

A report quoted industry executives as having said that while green shoots of recovery are visible, rural demand is still trailing urban markets.

New Delhi: Rural income stress has cast its shadow on demand of fast-moving consumer goods, Business Standard has reported, quoting industry executives. The news outlet, reporting on the Confederation of India Industry’s FMCG Summit, noted that while urban demand for FMCG was rising there is yet to be a revival in rural demand.

Dabur India chief executive officer Mohit Malhotra was quoted as having said that while green shoots of recovery are visible, rural demand is still trailing urban markets. Liquidity issues are plaguing rural areas despite the festive season, Malhotra said.

Rural demand has been down since the COVID-19 pandemic, and its effects continue to be felt, as pointed out by the country’s largest FMCG major, Hindustan Unilever.

Angshu Mallick of Adani Wilmar noted that the rabi harvest could reflect a hike in rural demand.

However, the report by market researcher NIQ had said that rural markets showed “signs of recovery”, with consumption picking up in the September quarter compared to the year-ago period.

In late November, Business Standard had reported that persistent low demand in the sector is causing supply chain congestion, leading to an increase in inventory days, with stocks accumulating at distributors’.