KUALA LUMPUR: Malaysian palm oil futures rose on Tuesday, recovering some of the ground lost in the previous three sessions, on the back of a government production forecast that came within expectations.
However, market sentiment was cautious ahead of price forecasts at an industry conference in Kuala Lumpur. Leading industry analyst Dorab Mistry is due to speak at the conference this afternoon.
"Trading continues to be cautious ahead of price outlook to be shared at the industry conference," said a futures trader based in Kuala Lumpur.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange was up 0.65 percent at 2,479 ringgit ($635.64) a tonne at the midday break.
It hit its lowest since Feb. 5 on Monday after top edible oils importer India said last week that it would raise import taxes on the vegetable oil to the highest level in more than a decade, and as the ringgit strengthened, making the tropical oil more expensive for foreign buyers.
Trading volumes stood at 13,884 lots of 25 tonnes each at the midday break on Tuesday.
"The market is still waiting for Mistry's input and the production figures are within expectations," said another Kuala Lumpur-based trader.
Malaysia's minister for plantation industries and commodities, Mah Siew Keong, said at the industry conference that the country's crude palm oil output was seen at 20.5 million tonnes this year.
Mah said the country would respond with "might and tact" if the European Union proceeds with a plan to limit the use of palm oil in biodiesel.
In other related oils, the Chicago Board of Trade's May soybean oil contract was up 0.3 percent, while the May soybean oil on China's Dalian Commodity Exchange was unchanged. The Dalian May palm oil contract was up 0.7 percent.
Palm oil prices are impacted by movements in rival edible oils as they compete for a share in the global vegetable oils market.
Palm oil may retest a support at 2,448 ringgit per tonne, a break below which could cause a loss to the next support at 2,418 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals.