MALAYSIA: Malaysian palm oil futures came off near three-month lows to trade higher on Tuesday evening after concerns about a decline in February production, traders say.

Market signals, however, were mixed earlier in the day as some forecast output gains, while exports in February are expected to improve, said traders.

Benchmark palm oil futures for April delivery on the Bursa Malaysia Derivatives Exchange were up 0.4 per cent at 3,049 ringgit ($685.48) a tonne at the end of the trading day. Earlier in the session, they hit 3,011 ringgit, their lowest levels since November 2016.

Traded volumes stood at 61,882 lots of 25 tonnes each on Tuesday evening. A Kuala Lumpur-based trader said physical prices were still very strong, indicating that market supplies are still tight due to lower production levels.

Another trader added that the market was supported by expectations of bullish export data from cargo surveyors for the first half of February due for release on Wednesday. `That coupled with technical buying since palm prices rebounded off lows` had aided the market, said the trader.

Palm oil shipments in the first 10 days of February slipped to 3pc from the corresponding period in January, showed cargo surveyor data, as demand for the tropical oil waned af ter the Lunar New Year celebrations.

During the Lunar New Year celebrations, there is more demand for the tropical oil from top consumer China. Output levels are still seeing the impact of the crop-damaging El Nino, but its effects are seen tapering off towards a bigger recovery by the second half of this year. Production for January declined 13.4pc to 1.28 million tonnes, its sharpest drop in a year, according to data f rom the Malaysian Palm Oil Board on Friday.-Reuters