FMCG curve goes up as COVID curve goes down


As the nation slowly recovers from the horrors of the second wave of the Covid 19 pandemic, the economy is slowly and steadily recovering. As test positivity rates and daily confirmed cases go down the nation is slowly flattening the curve and getting ready to go about their normal lives, one sector that is picking up the pace of recovery fast is the Fast-moving consumer goods (FMCG) sector. The shares of FMCG stocks have started to trade positively. Dominated by the likes of big players like ITC, HUL, Brittania, Nestle, Dabur, and Jubilant foods. The sector had a worst few months following the outbreak of wave two of the pandemic. 

Relaxation of Covid 19 restrictions has led to a 15-20% increase in sales of fast-moving consumer goods (FMCG) across shops throughout the country and a 20-25% increase in supermarkets and trade outlets in the past week. Some shops have reopened while others have extended their operating hours as allowed and notified by the state governments. Rural and semi-urban markets drive the growth of the FMCG sector. A full-scale reopening is still a major doubt in many parts of the nation and will solely depend upon the role of vaccines and how quickly we can vaccinate the major portion of our citizens.  

FMCG stocks have gained in the stock markets further showing positivity for the sector. As the monsoon has started it has also increased hopes as the FMCG sector is one of the sectors that do well during normal monsoon seasons and the weather forecasting has indicated a normal monsoon for the third year running. And the Kharif season has already picked up the pace. The latest data from the Ministry of Consumer Affairs, Food & Public Distribution has shown that the paddy procurement for this seasons Kharif 2020-21 is continuing smoothly in the procuring States with purchases hitting numbers like 816.65 LMTs of paddy  (includes Kharif Crop 706.96 LMT and Rabi Crop 109.69 LMT). Which further adds proof of our recovering sector. Flattening curves, lifted restrictions, mass vaccinations, adopting COVID compatible models of operation and the momentum of the recovering global economy will further speed up the FMCG sector recovery.  

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