MUMBAI: Commodity inflation driven by the West Asia war has been ‘significant’ in the June quarter and it will take a while for things to come to normalcy, said Nitin Paranjpe, chairman at Hindustan Unilever (HUL), projecting short-term growth to be hit by volatility and challenges. The conflict that dragged on for months disrupted energy supplies, pushing up oil prices to over $100 per barrel and weighing on raw material costs for companies, which nudged them to take at least one round of price hikes. A fragile truce is in place for now and oil prices have cooled, but with local retail fuel price increases feeding into broader inflation, firms will have to pass on part of the cost impact to consumers. “Business resilience today is about building better systems: supply chains that can shift when a route is disrupted….factories that can switch faster…sourcing models that reduce dependency on any single material or geography,” Paranjpe told shareholders at the company’s annual general meeting (AGM) on Tuesday. HUL has already hiked prices by 2-5% to cope with a 8- 10% cost inflation while signalling that more increases could be in the offing. Paranjpe said that the company is tapping into its cost efficiency programmes to shield consumers against larger price hikes. Analysts at Goldman Sachs estimate the impact of fuel price hikes to weigh primarily on Q2 (CY) consumption with some spillover into Q3 (CY) as households adjust to higher fuel costs. For companies, the bigger challenge going ahead is tackling the expected impact of weak monsoons on rural consumption, key to driving sales volumes. Rural demand has been outpacing urban for FMCG companies for the past several quarters. Indian consumers, Paranjpe said, are exhibiting a “dual-speed behaviour”—remaining value conscious even as they experiment with new formats, flavours and premium offerings. Under new CEO Priya Nair, HUL has sharpened focus on creating different strategies for different consumer classes. The company has also doubled down on quick commerce, deployed AI across the value chain, stepped up premiumisation push and acquisition of new-age brands amid changing consumption patterns.