Prices of Cola, Shampoo, Toilet Paper, and Diapers Set to Rise One After Another

P&G to Raise Prices by 5-10% from September... Coca-Cola Cites "Raw Material Cost Increase"
Despite Inflation Concerns, Fed Maintains "Price Surge Is Temporary" Stance

[Image source= EPA Yonhap News]

[Asia Economy Reporter Byunghee Park] As prices of food and daily necessities such as cola, toilet paper, shampoo, and diapers continue to rise, consumers are expected to feel a greater burden from inflation. The Wall Street Journal reported on the 20th (local time) that Procter & Gamble (P&G), which produces toilet paper and shampoo, announced plans to raise product prices this fall.

P&G stated today that starting in September, it will increase prices of feminine care products and baby products by about 5-10%. P&G explained that raw material prices such as pulp have risen, and due to the Texas cold wave in February, the supply of plastic products like polyethylene and polypropylene remains unstable. They also added that transportation costs have increased.

P&G’s competitor Kimberly-Clark also announced price increase plans last month. Kimberly-Clark, which produces Huggies diapers, said it will raise product prices by 5-10% starting at the end of June.

Coca-Cola also announced on the same day that it will raise prices of some products reflecting the rise in raw material costs. The timing and extent of the increase were not disclosed. Earlier, American food companies such as Hormel Foods and JM Smucker also announced plans to raise prices one after another.

The U.S. consumer price index (CPI) increase rate in March (year-over-year) recorded 2.6%, the highest since August 2018.

Although concerns about inflation are growing, the U.S. central bank, the Federal Reserve (Fed), maintains the position that the price surge is temporary.

Fed Chair Jerome Powell recently wrote in a letter to Republican Senator Rick Scott that some prices may rise somewhat due to economic recovery and supply chain instability. However, Chair Powell emphasized that the price increase will be temporary and that even if prices surge, the Fed can sufficiently control inflation.

Senator Reed sent a letter to Chair Powell at the end of last month expressing concerns about inflation and the Fed’s large-scale bond purchase policy. In response, Chair Powell replied that "inflation this year will not significantly exceed 2%, and even if it does, it is not expected to be prolonged."