India Demand May Cushion Palm Oil Stockpile Concerns

Dow Jones09:38

0138 GMT - Potentially higher edible oil demand from India might mitigate concerns over Malaysia's rising palm oil stockpiles, following lower Indian import duties that took effect Thursday, Maybank analyst Ong Chee Ting says in a note. Sunflower oil is expected to be the key beneficiary, as its import duty was reduced by 10 percentage points, compared with 5 percentage points for crude palm oil and soybean oil, he reckons. This could encourage higher sunflower oil imports and support overall edible oils demand ahead of Diwali, he says. The increase in Indian demand may provide some support to Malaysian CPO prices, which are currently around 4,400 ringgit-4,500 ringgit a ton, he adds. Maybank maintains a neutral rating on Southeast Asia's plantation sector, pegging Kuala Lumpur Kepong, Sarawak Oil Palms and Genting Plantations as top buys.

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