Synopsis: Rising palm oil prices and supply uncertainties have put India’s edible oil industry under pressure, forcing companies to rely on different strategies. While AWL leverages scale, sourcing strength, and distribution leadership to navigate disruptions, Patanjali is building long-term resilience through domestic oils and oil palm plantations.
India’s edible oil industry remains highly dependent on imports, making it vulnerable to global supply disruptions and commodity price volatility. As palm oil prices rise amid geopolitical tensions and tighter supplies, leading players are being forced to adapt.
AWL and Patanjali Foods represent two distinct approaches to managing this challenge. One relies on scale, procurement efficiency, and market leadership, while the other focuses on self-reliance through domestic sourcing and plantation development. Their contrasting strategies offer valuable insights into the future of India’s edible oil sector.
Palm Oil Volatility Has Once Again Put India’s Edible Oil Sector Under Pressure
In FY27, the Indian edible oil industry was entering the year under a new cloud of uncertainty. Rising geopolitical risks, high crude oil prices, compulsory biodiesel use in exporting countries, and constrained supplies of global vegetable oil markets have caused the cost of palm oil to spike.
In the earnings call of each company, AWL Agri Business and Patanjali Foods have mentioned that the edible oil market environment is now becoming more volatile. While both are in the same industry, each company’s response to this issue shows how different their approaches can be.
AWL operates based on the principles of size, sourcing, distribution, and execution. On the other hand, Patanjali operates by minimizing dependency on imported oils through domestic edible oil segments and oil palm plantations. In this context, the question to consider as an investor is the following: In the event of disruption in palm oil supplies, whose strategy wins the defensive battle?
AWL’s Strength Lies in Scale and Market Leadership
AWL goes into any supply disruption with a scale advantage that few others can match. In its FY26 year, the company managed to sell 6.8 million metric tonnes of products and cross Rs 74,000 crore in terms of revenue, becoming one of the biggest players in the Indian market for food and edible-oil products.
Despite volatility, the company was able to post an increase in edible oil volume by 17% in Q4 FY26, as well as cross the Rs 21,000 crore mark in terms of quarterly revenue. The management talked about how the Iran conflict affected the situation, limiting vessel availability, increasing edible oil prices, and weakening the Indian rupee.
Still, under all of these conditions, the company posted record levels of revenue, EBITDA, and profitability. More important, AWL managed to capture an additional 60 basis points in the market share of edible oils within the quarter.
Here, the scale factor gives AWL an edge. The larger the procurement volume and better the supplier relationships, the more extensive the distribution and better the working capital management, and the better the company copes with disruption. In fact, when disruption hits the market, only companies that manage to maintain their availability take shares from competitors.
Patanjali Is Betting on a Different Future
While AWL is about efficient import management, Patanjali is ready for the day when India starts decreasing its reliance on imported edible oils. Management found out that as the prices of palm oil, soybean oil, and sunflower oil rose, people started switching to locally made oils, including mustard oil, groundnut oil, and cottonseed oil. The point here is that continuous inflation of imported oils will speed up the tendency.
Patanjali consciously created an investment portfolio that would be able to capitalise on such developments. By diversifying into several types of locally made oils, the company can profit from consumers’ behaviour when faced with high prices for imported oil. It looks like Patanjali is positioning itself for a change rather than handling a temporary problem.
Oil Palm Plantations Could Become Patanjali’s Biggest Strategic Advantage
The unique aspect about the edible oil plan for Patanjali Oil is the company’s oil palm plantation venture. By FY26, Patanjali Oil will have planted oil palms covering 1.1 lakh hectares of land in 12 states. Approximately 38 percent of these oil palms will be in the prime yield stage.
Unlike other edible oils that are purely reliant on third parties for their supply chain, Patanjali Oil is actively involved in India’s plans for domestic palm oil production. The company’s management consistently pointed out the advantage created through import substitution.
The main difference between the two companies is that while AWL’s expertise lies in managing imports of palm oil effectively, Patanjali’s strength lies in weaning off imported palm oil. Given the likelihood that the volatility of palm oil will continue into the next decade, the oil palms plantations can prove to be some of Patanjali’s most prized assets.
Distribution Strength Favors Both Companies
The supply shock, therefore, is not only about sourcing but is also about sustaining products despite competitors struggling for availability. AWL has created one of the most extensive food and edible oil supply chains with a reach of almost 2.6 million points of sale using both direct and indirect channels. The company is also expanding at a very fast pace via alternate channels, quick commerce, HoReCa, and exports. The alternate channels have grown by 43%, the HoReCa channel by 64%, and branded exports by 48% in Q4 FY26.
On similar lines, Patanjali too has made rapid strides towards developing its retail footprint across the nation. The management feels that any volatility will adversely affect small regional players while organised players like their company will benefit. Thus, in this context, the two companies are well-positioned for gaining market share amidst volatility.
Brand Power Becomes Critical During Cost Inflation
Perhaps one of the toughest parts of dealing with a shock to the palm oil supply chain would be to pass the increased costs onto the customers. Firms with brand names have more pricing power than firms without.
AWL takes advantage of the strong brand name associated with Fortune, a product which still rules many of the edible oil segments. AWL also sells its premium oils in the form of Fortune Premio.
Patanjali’s branded products account for a majority of their sale revenues of edible oils. Their strong brand names like Ruchi Gold and Mahakosh ensure that consumers do not leave despite inflation. Strong brands not only make sure that the firm remains profitable but also guarantee that consumers do not leave despite switching between various segments of oil.
The Real Debate Is Scale Versus Self-Reliance
Initially, it seems clear that AWL is the clear winner based on its larger size, better sourcing ability, and overall dominance in the market. However, it all comes down to what kind of disruption we have.
AWL’s strengths become almost impossible to ignore if the disruption lasts for a couple of quarters. It has already shown its strength in dealing with vessel shortages, edible oil price surges, currency changes, and other problems while maintaining market growth.
On the other hand, if palm oil prices remain volatile and become an inherent problem, Patanjali will start seeming like a more attractive option. This company is working on improving its own sources while, at the same time, profiting from consumers’ shift towards domestically produced edible oils. In other words, AWL is improving the existing system, whereas Patanjali is preparing for a new one.
So Which Company Is Better Positioned?
The solution lies in whether the shock is seen as cyclical or structural by the investors. If the shock is viewed as a short-term disruption, then AWL emerges as the clear winner. Its size, procurement abilities, logistics prowess, working capital position, and market leadership ensure that it is better positioned to handle any short-term issues within the supply chain.
AWL has shown its ability to grow volumes and increase market share even amidst high levels of volatility in the FY26 period. If, however, investors see the problems in palm oil supply lasting for several years and India increasing its efforts at ensuring edible oil self-sufficiency, then Patanjali appears to have the superior model.
Patanjali’s investments in oil palm plantations, association with domestic oil products, and adherence to import substitution initiatives offer it an edge that many other companies lack.
In reality, this discussion is not about Adani versus Patanjali. It is about two completely different models, a debate between scale and operational execution versus self-sufficiency. In the case of the current palm oil shock, AWL has the stronger hand. However, should India seek self-sufficiency in edible oils, Patanjali might end up having the more advantageous model.
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