Adani Wilmar cuts production of Fortune cooking oil brand by 40 per cent

Adani Wilmar has cut production of its Fortune brand cooking oil by 40 per cent after a countrywide lockdown to prevent the spread of the coronavirus disrupted labour.

"Sales of cooking oils too have fallen 25 per cent with the closure of all hotels, restaurants and cafeterias because of the national lockdown to control Covid-19," said Angshu Mallick, deputy CEO of Adani Wilmar.

In the packaged edible oil segment, Adani Wilmar is a market leader with over 20 per cent share.

"We used to process and produce around 8,000 tonnes of edible oil per day. The production level has come down by 40 per cent because of the labour shortage," Mallick told PTI.

According to him, the reason behind this is that a large number of migrant labourers have gone back to their hometowns, while locals are not willing to work because of fear of getting infected by Covid-19. 

The company, which has around 25 processing plants across various states, is transporting cooking oils through trucks as more labourers are required to move goods through railways. However, according to Mallick, the imports of edible oil are happening smoothly and the global commodity prices are stable.

While asked about the price situation, he said the company has not increased the retail prices after lockdown, although the labour and freight costs have increased. He further added that the harvesting of mustard crop will gain momentum from next week in states like Rajasthan, boosting domestic output.

On demand for other food items under the Fortune brand, Malick said sales of branded wheat flour, broken basmati, pulses, besan (gram flour) and soyabean chunks have risen sharply.

In view of the lockdown, Adani Wilmar has partnered with Swiggy for home deliveries of its food items. The country's total edible oil demand is 230 lakh tonnes annually, which is largely met through imports.

India's total vegetable oil (edible and non-edible) imports increased by 3.5 per cent to 155.5 lakh tonnes in the 2018-19 marketing year (November-October).

While shipments of edible oil increased to 149.13 lakh tonnes in the 2018-19 marketing year from 145.16 lakh tonnes in the previous year, the imports of non-edible oil grew to 6,36,159 tonnes from 5,09,748 tonnes during the period under review.

During November 2019 to February 2020 period of the current oil year, imports have fallen by 6.1 per cent to 45,63,791 tonnes, compared to 48,62,849 tonnes in the corresponding period of the previous year.