Goldman Sachs downgrades Wilmar (F34.SG) to Neutral from Buy, and cuts its target to $ 6.25 from $ 7.00 as it now values company against the Southeast Asian commodities sector instead of the plantations sector.

“The Asean plantations sector may not be as good of a comparable for Wilmar as its earnings are not as highly leveraged to CPO prices.”

Says Wilmar’s cooking oil margins in China may come under pressure in the near term as Beijing has told major producers not to raise selling prices for the next 4 months.

Adds Wilmar’s expansion in China’s flour and rice markets may yield thin margins in the near future as it focuses on building up its market share to achieve a critical mass.

Expects Wilmar’s sugar plantation investments to make a significant contribution only after 2012. Shares down 1% at $ 5.98.