AWL Boosts Edible Oil Stocks Amid Ongoing Global Disruptions

AWL Agri Business, India's largest edible oil refiner, has increased its inventory of imported edible oils to 40-45 days from its usual 30-35 days. This move is a response to ongoing supply disruptions in the Middle East and Russia-Ukraine conflict, which are causing shipping delays and volatility in global markets.

The company's CEO, Shrikant Kanhere, stated that AWL has adopted a strategy similar to the one used during COVID to guard against supply snarls from geopolitical conflicts. This approach involves building up inventories of imported edible oils to mitigate risks associated with supply chain disruptions.

India is the world's largest importer of edible oils, meeting nearly two-thirds of its demand through imports from countries including Indonesia, Malaysia, Brazil, Argentina, Russia, and Ukraine. The country's edible oil market has been affected by the ongoing conflicts, leading to a decline in overall stocks over the last few months.

Deven Choksey, managing director of fund and wealth manager DRChoksey FinServ, noted that supply chain volatility is becoming a medium-term baseline, and disruptions are no longer viewed as short-term blips. AWL's move to increase its inventory levels could help larger brands gain share from smaller rivals, as refiners with stronger balance sheets can afford to hold larger inventories and avoid stock-outs.