India's AWL 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.

"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.

The company, which is cutting packaging and fuel use at its plants to limit the hit to profits, expects per-tonne 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.