Adani Wilmar, who sells edible oils under the Fortune brand, said on Saturday that production of cooking oils had decreased by 40% due to labor shortages under the current closure, resulting in a tightening of essential supplies.
Sales of cooking oils also fell 25% with the closure of all hotels, restaurants and cafeterias due to the lockout of control of Covid-19, said Angshu Mallick, deputy CEO of Adani Wilmar.
In the packaged edible oils segment, Adani Wilmar is a market leader with more than 20 percent share.
“Before, we processed and produced around 8,000 tonnes of edible oil per day. The production level has dropped by 40% due to the labor shortage, “said Mallick.
He said a large number of migrant workers have returned to their hometowns, while locals are unwilling to work for fear of being infected with the disease.
The company, which has about 25 processing plants in various states, transports cooking oils by truck because more workers are needed to move goods by rail.
“Demand has also fallen by 25%,” said Mallick, adding that the supply situation would remain tight as production fell more than demand.
Asked about the price situation, he said the company had not increased retail prices after the foreclosure, although labor and freight costs had increased.
Malilick said imports of edible oil are going smoothly and that world commodity prices are stable.
He also said that the mustard crop will gain ground from next week in states like Rajasthan, thereby boosting domestic production.
At the request of other food products under the Fortune brand, Malick said sales of branded wheat flour, broken basmati, pulses, besan (gram flour) and soybean chunks have increased sharply.
Given the foreclosure, Adani Wilmar has partnered with Swiggy for the home delivery of its food products.
The country’s total demand for edible oil is 230 lakh tonnes per year, which is largely met by imports.
Total vegetable oil imports (edible and inedible) from India increased by 3.5% to 155.5 lakh tonnes during the 2018-2019 marketing year (November-October).
While edible oil shipments increased to 149.13 lakh tonnes in the 2018-2019 marketing year, compared to 145.16 lakh tonnes the previous year, imports of inedible oil increased to 6, 36,159 tonnes compared to 5,09,748 tonnes during the period considered.
During the period from November 2019 to February 2020 of the current oil year, imports decreased by 6.1% to 45.63,791 tonnes, compared to 48.62,849 tonnes for the corresponding period of the previous year.