Wilmar International (WLIL.SI), the world’s largest palm oil plantation firm by market value, said it remains optimistic about its 2011 outlook after its quarterly earnings missed forecasts due to weaker margins.

Wilmar, which earned more than half of its revenue from China, is facing huge pressure on its margins as a result of a rising food prices which push up its feed stock while price caps in China have not allow it to pass on the surge in production costs.

“Despite the weaker performance for the year, the group is optimistic of its performance in 2011,” Wilmar’s chairman and chief executive Kuok Khoon Hong said in a statement.

“The outlook of Asian economies, especially China, India and Indonesia remains positive and commodity prices are expected to remain firm,” he added.

Wilmar’s palm oil plantations in Indonesia and Malaysia supply  less than 10% of the demand of its refineries while logistical and regulatory challenges prevent the company from expanding plantation area.

The company, which has a market value of US$27 billion ($34.6 billion), booked a net profit of US$318.6 million for the quarter ended December, down from US$442 million a year ago, and missed analysts forecasts of US$378 million.

The company said its oilseeds and grains business reported a pretax loss of US$173.2 million in the fourth quarter despite a 15.9% increase in revenue to US$3 billion, and 4.2% increase in volume.

Wilmar said in the statement the performance of the oilseeds and grains business reflected “very poor crush margins from excessive imports of beans by the industry and the group’s less timely purchases of raw materials.”

The company is China’s largest soy processor with a market share of 20%, measured in installed capacity. It also has a number of edible oil processing plants in China and recently paid US$1.5 billion to acquire Australia’s Sucrogen, the world’s fifth largest sugar-refiner.

Wilmar’s shares have dropped by more than a fifth since hitting a 6-month peak in November, underperforming the Singapore benchmark index <.FTSTI> which fell by only 9% during the same period.