AWL Agri Business, India’s largest edible oil company and maker of the Fortune brand, has increased its edible oil inventories as geopolitical tensions in the Middle East and the Russia-Ukraine conflict continue to disrupt global supply chains, signalling a strategic shift towards greater resilience in sourcing and logistics.
The company has raised its inventory cover for imported edible oils to 40–45 days, up from its usual 30–35 days, mirroring the stockpiling strategy it adopted during the COVID-19 pandemic to safeguard supplies amid unprecedented disruptions.
“We are living in a very dynamic world and you don’t know what’s going to happen tomorrow. Keeping these disruptions in mind, we have increased our holding days to some extent,” said Shrikant Kanhere, CEO and Managing Director of AWL Agri Business.
Supply Chain Risks Redefine Inventory Strategy
India, the world’s largest importer of edible oils, depends on overseas markets for nearly two-thirds of its domestic demand, sourcing products from countries such as Indonesia, Malaysia, Argentina, Brazil, Russia and Ukraine. Ongoing geopolitical conflicts and shipping disruptions have prompted food companies to reassess inventory management and procurement strategies.
AWL’s move comes as refiners across the country rebuild edible oil stocks ahead of the festive season after inventories had declined in recent months due to lower imports.
Kanhere said the company intends to maintain elevated inventory levels until global logistics stabilise and the risk of recurring disruptions eases.
Strong Balance Sheets Offer Competitive Edge
Industry experts believe larger food companies with stronger financial resources are better positioned to absorb the higher working capital requirements associated with holding additional inventories.
According to Deven Choksey, Managing Director of DRChoksey FinServ, supply chain volatility has become a medium-term business reality rather than a temporary challenge. He noted that companies such as AWL, backed by global agribusiness giant Wilmar International, can afford to maintain larger stock buffers, reducing the risk of supply shortages while potentially gaining market share from smaller competitors with limited financial flexibility.
He also described Patanjali Foods’ decision to increase edible oil inventories as a significant strategic shift, indicating that major players across the sector are adopting a more cautious approach to supply chain management.
Limited Impact on Profitability
While higher inventory levels typically require additional working capital, Kanhere said the impact on AWL’s profitability has remained limited. He noted that edible oil prices continue to move in line with international commodity markets, while the company’s packaged foods portfolio is relatively insulated from sharp price volatility due to greater reliance on domestic sourcing.
As geopolitical uncertainty continues to reshape global trade routes, India’s leading edible oil companies are increasingly prioritizing supply security over lean inventory models, reflecting a broader shift in how the food industry manages operational risk in an unpredictable global environment.