Malaysian palm oil futures rose more than 1 percent in trade on Tuesday, earlier tracking gains in rival oilseed soya and supported by bullish sentiment on tight market supplies in the evening. It was little affected by an industry group forecast of rising production this year as the market has already factored this in, traders said.
Palm oil output may rise by 12 percent this year to 19.4 million tonnes from 17.4 million tonnes in 2016, the Malaysian Palm Oil Board (MPOB) said at a conference in Kuala Lumpur.
Benchmark palm oil futures for April delivery on the Bursa Malaysia Derivatives Exchange had risen 1.6 percent to 3,159 ringgit ($708) a tonne by the end of the trading session.
Traded volumes stood at 38,068 lots of 25 tonnes each.
"Physical market prices are very high, there is no oil in the market," said a futures trader based in Kuala Lumpur.
Another trader had earlier said the market in the morning was supported by stronger performing soyaoil on the Chicago Board of Trade.
"Other factors are already known facts and we have yet to see higher production," he said.
Palm oil prices are typically impacted by the movement of related vegetable oils as they compete for a share in the global edible oils market.
The March soyabean oil contract on the CBOT rose 1 percent, while the May soyabean oil contract on the Dalian Commodity Exchange was up 0.8 percent.
Chicago soyabean futures also rose as heavy rains across Argentina's central crop belt raised concerns over yield losses.
In other related edible oils, the May contract for Dalian palm olein gained 0.2 percent.
Palm oil is poised to leave a wedge and develop a trend, as it is approaching the upper trendline of the pattern, according to Wang Tao, a Reuters market analyst for commodities and energy technicals.
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