The company did not cite the palm oil dispute as a reason for the increase in purchases.
But the two sources, who are familiar with discussions between the company and the government on the purchase, said it was a bid to appease India, which has been urging Malaysia
to reduce the trade deficit between the countries.
India, the world's largest edible oil buyer, this month effectively halted Malaysian palm oil imports
apparently in retaliation to Malaysian Prime Minister Mahathir Mohamad's comments criticising New Delhi over its policy on Kashmir.
has said it will look to other markets to sell more palm oil but that may not be easy as India has been the biggest buyer of Malaysian palm oil for the past five years, purchasing 4.4 million tonnes in 2019.
Malaysia's exports to India were worth $10.8 billion in the fiscal year that ended on March 31, while imports totalled $6.4 billion.
Malaysia imported a total of 1.95 million tonnes of raw sugar in 2019, according to data from the International Sugar Organization on Refinitiv Eikon. It typically buys more from Brazil and Thailand than from India.
India is the world's biggest sugar producer but is struggling with a surplus. Its exports are expected to rise to a record 5 million tonnes for the 2019/20 season.
MSM said it was expecting the arrival of three shipments of raw sugar from India between January and February.
"This is very good move. It will help India in increasing sugar exports," Praful Vithalani, president of the All India Sugar Trade Association told Reuters about MSM's move to buy more from India.
Around 50,000 tonnes of raw sugar has already been contracted by Malaysia for January shipments, said a Mumbai-based dealer with a global trading firm.
Palm oil falls 1.7% on talk of lower demand
Malaysian palm oil futures fell 1.7 per cent on Thursday, giving up nearly half their gains from a rally in prices in the previous session on market talk that India may exempt it from a cut in import duties, denting demand. The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange extended losses and closed at 2,923 ringgit per tonne after jumping 3 per cent in the previous session. - Reuters