Demand for the tropical oil would also face headwinds from bulging world supplies of rival soyoil and weak Brent crude prices that make palm an unattractive option for blending into biodiesel, they added.
"Fundamentals reign supreme; the upside is being capped by subdued demand and worries that consumers could shift their interest to South America for soyoil," Lingam Supramaniam, director at Malaysia-based commodities firm Pelindung Bestari, told Reuters at the end of the conference in Kuala Lumpur.
The bullish short-term outlook drove up palm futures to an almost eight-month top of 2,400 ringgit ($659) per tonne on Wednesday, but prices gave up gains to end at 2,365 ringgit on the long-term bearish view.
Vegetable oils analyst Dorab Mistry sees palm rising to 2,500 ringgit by May, but dropping to as much as 2,100 ringgit by December as output rises. ]
"This is going to be a year of two halves. Demand will outstrip supply in the first six months and gradually supply will increase in the second half," said Mistry, who heads the vegetable oil trading arm at India's Godrej Industries.
"Until July, world vegetable oil stocks and particularly palm oil stocks will remain very tight," he added.
Thomas Mielke, editor of Hamburg-based newsletter Oil World, also sees "bullish supply fundamentals". He expects 2014/15 global palm oil output to grow, but by 1.5 million tonnes - the smallest rise in 13 years.
CRUDE OIL EYED
The direction for palm oil prices was expected to hinge on crude oil markets, conference participants said.
A near 50 percent plunge in Brent last year eroded demand for the tropical oil from the biofuels sector and was partly responsible for a 15 percent drop in palm values.
James Fry, chairman of LMC International Ltd, expects palm prices to average 2,260 ringgit in the first half on low demand from biofuel producers, who accounted for millions of tonnes of consumption per year for most of the past decade.
Prices may drop to more than six-year lows of 1,770 ringgit if biodiesel demand does not pick up, he said.
Mielke, however, said the industry must stop looking at mineral oil prices as an indicator for the edible oil market.
THE INDIAN SWING
All eyes are now on overseas purchases by top edible oil importer India.
India's edible oil imports are seen at a record high of 12.5-13.0 million tonnes in the year to October, as dismal domestic oilseed output prompts higher purchases.
While Indian palm imports are slated to rise, the tropical oil may lose market share to rival soyoil.
"India is the one that is most interesting," Fry told Reuters on the sidelines of the conference. "India can swing - and India does swing as prices change."
($1 = 3.6445 ringgit)