Palm oil advanced for a second day on speculation that shipments from Malaysia, the second-largest producer, may increase this month as exporters boost sales before a tax increase in March.

The contract for delivery in May climbed as much as 1.3 per cent to RM2,568 a metric tonne on the Malaysia Derivatives Exchange, before trading at RM2,556 at 11:24am in Kuala Lumpur.

Malaysia will tax crude palm oil exports at 4.5 per cent in March after shipments were allowed at zero duty in January and February, according to the Customs Department. Exports climbed 18 per cent to 673,555 tonnes in the first 15 days of February from the same period a month ago, surveyor Intertek said February 15.

"Exports have improved in the first half and there has been some encouragement to push for more exports before March," Josephine Goh, a trader at OSK Investment Bank Bhd, said by phone from Kuala Lumpur. "Some element of sentiment play will keep prices supported ahead of the general elections."

Prime Minister Datuk Seri Najib Razak must dissolve parliament by April 28 for an election to be held within 60 days. Palm oil inventories in Malaysia slid 1.9 per cent to 2.58 million tonnes last month from an all-time high of 2.63 million tonnes in December, the nation's palm oil board said February 13.

Refined palm oil for delivery in September gained 0.7 per cent to 7,108 yuan a tonne on the Dalian Commodity Exchange. Soybean oil for delivery in the same month climbed 0.5 per cent to 8,686 yuan a tonne.

Soybean for May delivery advanced 1.4 per cent to US$14.345 a bushel on the Chicago Board of Trade. Soybean oil rose 0.6 per cent to 52.31 cents a pound.-- Bloomberg