AWL Raises Edible Oil Stocks to 45 Days Amid Shipping Risks

The Story in Brief

AWL Agri Business has increased its imported edible oil inventory to cover 40 to 45 days of demand, up from its usual 30 to 35 days. CEO Shrikant Kanhere told Reuters that the Fortune cooking oil maker is guarding against supply disruptions linked to conflicts in the Middle East, Russia and Ukraine.

India imports nearly two-thirds of its edible oil from countries including Indonesia, Malaysia, Brazil, Argentina, Russia and Ukraine. The Economic Times reports that AWL and Patanjali Foods are rebuilding stocks before the festive season. The higher inventory may lower stock-out risks but tie up cash. AWL said the effect on margins has been limited.

The Indian Opinion

Claims of an imminent edible oil shortage would go beyond the facts available here. AWL is taking a precaution, not reporting empty shelves or a sharp margin hit. Large refiners can carry extra stock, while smaller firms may face tighter cash flows and weaker bargaining power. Consumers should watch retail prices and availability during the festive season, rather than treat higher company inventories as proof of a supply crisis.

Source: economictimes.indiatimes.com

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