By Luzi Ann Javier April 16 (Bloomberg) -- Palm oil futures, little changed, may rise on lingering concerns that low rainfall in Malaysia, the world’s second-largest supplier, will reduce global output, potentially causing a shortfall. Palm oil for June delivery traded little changed at 2,521 ringgit a metric ton on the Malaysia Derivatives Exchange at the 12:30 p.m. trading break in Kuala Lumpur. The contract is headed for a 2.8 percent decline this week. CIMB Investment Bank Bhd. raised its forecast for crude palm oil prices by 5 percent for this year and 2011 to reflect the “bigger-than-expected” impact of El Nino and weaker output. “Edible oil supply may not be sufficient to cater for rising demand due to new biodiesel mandates and improving economic prospects,” Ivy Ng, a CIMB analyst, said in a report today. “The risk of a potential shortfall in palm oil production as we enter the second half of 2010 and 2011 remains.” CIMB increased its 2010 estimates to $800 per metric ton from $760, while its forecast for 2011 was raised to $830 from $790, it said in a report today. The rainfall deficit in Malaysia may mean the country misses a government forecast for 3.1 percent palm oil output growth to 18.1 million tons this year, Ng said. Production expanded 1.9 percent to 3.87 million tons in the first quarter from a year ago, according to data from the Malaysia Palm Oil Board. Malaysia accounted for 40 percent of global output last year, according to data from the U.S. Department of Agriculture. To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net

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