KUALA LUMPUR, Sept 1 (Bernama) — Kenanga Research has raised its 2010 average price assumption for crude palm oil (CPO) to RM2,400 per metric tonne from RM2,200 as it expects the current upward price trend to continue amid a supply concerns.

In its research note released here on Tuesday, Kenanga said 2010 could see another year of modest production growth due mainly to industry-wide cut in fertiliser usage since 2008, El-Nino and replanting activities.

It said while most planters maintained that they did not cut down fertiliser application, checks with major fertiliser supplier indicated double-digit fall in customers’ year-on-year intake.

“The results of lower fertiliser usage should manifest in the next 12 to 18 months, which we believe will be pronounced in 2010,” it said.

Kenanga said the current El-Nino was more likely to be mild, as the meteorology observations seemed to yield mixed results.

On the replanting activities, it said, most of the plantation companies had confirmed that their replanting plans to take advantage of the government’s subsidy.

Source :  BERNAMA

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