AWL Agri Business flags 20% rise in oil-linked costs amid Middle East conflict

Indian consumer goods maker AWL Agri Business is grappling with a roughly 20% surge in some crude-linked input costs as the Middle East conflict drives up prices for fuel, chemicals and packaging materials, its CEO said.

The pressures reflect a broader industry trend, with peers such as bottled ‌water maker ⁠Bisleri ⁠and Dove soapmaker Hindustan Unilever raising prices to counter higher conflict-linked input costs.

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"Costs ​have gone up for us in terms of chemicals, packing material and coal, ​so that is something which remains a cause of concern even today," Shrikant Kanhere, AWL's managing director and CEO, told Reuters in ​an interview.

AWL, home of brands including Fortune cooking ⁠oil and ‌Kohinoor rice, is adjusting prices in line with market movements, absorbing part of the increase while passing the ⁠rest on to consumers, Kanhere said, without giving details.

Input ​costs for some crude-linked materials have risen by ​about 20% since the conflict began, translating into a cost impact of roughly 25 to 50 basis points, he added.

Global oil prices have surged amid fears of supply disruptions. Brent crude has climbed from the low $70s a barrel before the Middle East conflict ‌to above $110, market data show.

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The company, which is cutting packaging and fuel use at its plants to limit ​the hit to ​profits, expects per-ton ⁠margins to be broadly stable in fiscal 2027.

AWL is also expanding distribution and investing heavily in online channels and large-format grocers, which together ​posted nearly 50% growth last year, in a push to scale up volumes.

Kanhere forecast sales volume growth of 8% to 9% in fiscal 2027, nearly double last year's pace, with edible oils growing at a mid-single-digit rate and foods posting double-digit growth.