India is Malaysia’s largest palm oil export destination, which accounted for 28% of the latter’s palm oil exports in the first nine months of 2019 (9M19) (versus 16.5% in 9M18). Over the longer term, we believe the impact will be less detrimental, as it is unlikely for India to ignore Malaysian palm oil completely, given its sheer demand for edible oil. According to news reports, India is planning to substitute Malaysian palm oil with supplies of edible oils from countries such as Indonesia, Argentina and Ukraine. India is the world’s largest importer of edible oils (of which palm oil accounts for nearly two-thirds of its total edible oil imports). We maintain our “underweight” stance on the sector, given its pricey valuations.

Source: The Edge Markets October 14, 2019 02:26 UTC