AWL increases oil inventories amid global supply chain disruptions

The Story in Brief

AWL Agri Business has increased inventories of imported edible oils over the past two months, raising its import stock cover to about 40-45 days from its usual 30-35 days, CEO Shrikant Kanhere told Reuters. The company, maker of Fortune cooking oil and a market leader in India, said the move mirrors its strategy during the COVID‑19 pandemic to guard against supply snarls from geopolitical conflicts. Shipping disruptions linked to wars in the Middle East and between Russia and Ukraine have prompted firms worldwide to reassess sourcing and logistics.

India meets nearly two‑thirds of its edible oil demand through imports from Indonesia, Malaysia, Brazil, Argentina, Russia and Ukraine. Overall stocks had declined after lower imports, but refiners are rebuilding inventories ahead of the festive season. Larger refiners backed by strong balance sheets, including AWL with support from Wilmar International, and others such as Patanjali Foods are holding more stock; this can help avoid stock‑outs but also ties up cash, while AWL says margin impact has been minimal.

The Indian Opinion

The article presents a measured business response to supply volatility rather than a dramatic crisis. Some commentary around such stories can be sensational, implying imminent shortages or permanent market upheaval; the facts here point to a precautionary inventory policy by larger refiners. It is reasonable that firms with stronger finances can hold more stock, but readers should note the uneven effects: smaller refiners may face competitive pressure and tighter cash flow. The company says the policy will continue until logistics risks ease, but the duration and wider impacts on prices and smaller players remain uncertain.

Original article: AWL stocks up on oil as global supply lines wobble (economictimes.indiatimes.com)

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