KUALA LUMPUR: CIMB Equities Research said its outlook for CPO price in 2011 is less bullish and it is projecting only a 5% rise on the 2010 average level and maintains its Underweight recommendation.

It said on Tuesday, July 13 it expects expect palm oil supply growth to go back to normal. It cited three factors were: (1) El Nino?s negative impact on yields fades; (2) farmers? resumption of normal/higher fertiliser dosage in 2010 due to lower fertiliser price will improve FFB yields in 2011, and (3) the attractive agriculture prices for oilseeds and edible oils will induce new plantings of annual oilseed crops for 2011.

?We maintain our CPO price forecasts of RM2,500 per tonne for 2010 and RM2,580 per tonne for 2011.

?Maintain UNDERWEIGHT call. As our CPO price forecasts are unchanged, we retain our earnings estimates and target prices for all the Malaysian planters in our coverage,? it said."