Godrej Consumer’s CEO ruled out reformulating soaps to reduce the use of palm oil. Palm oil prices have surged in recent months due to floods in top producers Indonesia and Malaysia. The company’s gross margin narrowed 175 basis points during the October-to-December period from a year earlier, the first shrinkage in two years. Soaps make up about a fifth of Godrej consumer’s revenue, and the company does not expect the price hikes to have an impact on sales as palm oil-based products, including soap, tend \”not to be discretionary\” goods that consumers can forgo, Sitapati said. The impact of palmOil prices on margins of larger rival Hindustan Unilever, which has been reformulating its soaps, is lower, analysts have said. Click here to read the full interview with Sudhir Sitapathi, the CEO of the India’s largest consumer goods maker, GodreJ Consumer Products, on CNN iReport.