KUALA LUMPUR: Malaysian palm oil futures inched higher on Tuesday along with other edible oils, but gains were limited by concerns over production and demand.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange rose 0.6 percent to 2,161 ringgit ($530.18) a tonne at midday break.
Traders were taking cues from an industry conference in the Malaysian capital to gauge outlook for the palm oil market.
"Market is likely to hold at these levels as production is coming off," a trader said on the sidelines of the conference.
Palm oil output typically falls on a monthly basis in the first quarter in line with seasonal trend.
But annual production outlook in top producers Indonesia and Malaysia continued to weigh on prices, the trader quoted earlier said.
Crop-friendly weather over the last few months in Indonesia and Malaysia will help drive up output of the edible oil, traders and industry players said, underscoring forecasts of record production for 2019.
Market players also said global demand may suffer its first contraction in two decades during the 2019/20 crop year due to rising domestic oilseed supplies in top buyer India and slowing demand in Europe and China.
Prices are expected to recover in the six to 10 months, leading palm industry analyst Thomas Mielke said on Monday.
In other related oils, the Chicago March soybean oil contract was last up 0.2 percent.
U.S. soybeans rose for a third consecutive session on Tuesday, as an expected trade agreement between Washington and Beijing stoked hopes of increased demand for North American oilseeds.
The May soyoil contract on the Dalian Commodity Exchange declined 0.3 percent and the Dalian May palm oil contract fell 0.5 percent.
Palm oil prices are affected by movements in soyoil, as they compete for a share in the global vegetable oil market.
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