Tightness in market supply also supported palm's gains, said traders, as the growth in production was weaker than anticipated earlier.

"Palm is up due to strong demand coupled with weak supply," said a futures trader from Kuala Lumpur. "The market doesn't see strong double digits in terms of production (growth)."

The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange was up 1.1 percent at 2,663 ringgit ($618.65) a tonne at the midday break. It earlier rose to 2,668 ringgit, its highest since May 15.

Traded volumes stood at 9,879 lots of 25 tonnes each at noon.

Palm oil shipments from Malaysia, the world's second largest producer of the tropical oil, rose between May 1-20, up 20 percent from the corresponding period last month, showed data from cargo surveyor Intertek Testing Services.

May exports are seen rising due to demand for Ramadan, the Muslim fasting month which takes place at the end of May. The holy festival sees Muslims break day-long fasts with communal feasting, leading to higher palm oil usage for cooking.

While palm oil output is seen rising in line with seasonal trend and as trees recover from a crop damaging El Nino weather pattern, production growth is not as strong as forecast, according to traders.

In other related vegetable oils, soybean oil on the Chicago Board of Trade was up 0.4 percent, while the September soybean oil contract on the Dalian Commodity Exchange rose 1 percent.

Palm oil prices are impacted by rival edible oils such as soyoil, as they compete for a share in the global vegetable oils market.